Working from home during COVID-19 may incur expenses, which you can claim at tax time. You can claim a deduction provided that the expense is related to your income, and you have a record to prove it.
The Australian Taxation Office (ATO) will accept a temporary shortcut or simplified method of calculating additional running expenses from 1 March 2020 until 30 June 2020, which may be extended depending on when work returns to normal.
You can also claim a deduction if you receive an allowance from your employer (not reimbursed) to cover your expenses working from home. Include this allowance as income in your tax return.
Expenses you can claim
- Electricity — heating, cooling, and lighting the work area you’re using
- Phone & internet
- Computer consumables — stationery, printer paper, and ink
- Cleaning costs of work area
- Home office (computers, printers, phones, furniture and furnishings) — you can claim either the full cost of items up to $300, or decline in value for items over $300.
Expenses you cannot claim
A deduction cannot be claimed for items provided by your employer, or if you have been reimbursed for the expense. You can’t claim:
- Occupancy expenses — mortgage interest, rent, and rates
- The cost of general household items — coffee, tea, milk, etc.
Calculating your running expenses
You can calculate your work-related additional running expenses in 3 ways:
- Actual cost method — all your running expenses calculated on a reasonable basis.
- Fixed rate method
- 52¢ rate per work hour for lighting, heating, cooling, cleaning, and the decline in value of office furniture
- the decline in value of a computer, laptop, etc.
- actual costs of stationery, phone & internet expenses, computer consumables
- Shortcut method — 80¢ rate per work hour for all additional running expenses
The shortcut method rate covers all deductible running expenses if you work from home due to COVID-19, in which you can claim a deduction of 80¢ rate per work hour.
Include the note “COVID-hourly rate” in your tax return in claiming a deduction and lodging your 2019–20 tax return through myGov or a tax agent.
Keep a record of the number of hours you have worked from home as a result of COVID-19, such as diary notes or timesheets.
Cash advance in Australia
If you’re on a tight budget or waiting for the next paycheck during COVID-19, a cash advance can help with your expenses.
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