Australians working from home due to the Coronavirus pandemic will be able to claim an 80 cent per hour tax deduction for expenses incurred whilst working from home. This deduction can be applied from 1 March 2020 to 30 June 2020.
The ATO has announced changes to the working from home tax deduction due to the Coronavirus pandemic. Instead of calculating the added expense of working from home, Australians will be able to claim 80 cents per hour of expenses for the period of March through to the end of financial year.
The ATO has maintained that this tax shortcut could also be applied for the next financial year but will monitor the situation and advice from the Federal Government.
To Claim a Working From Home Deduction
- You must have spent the money.
- The expense must be directly related to earning your income.
- You must have a record to prove it.
This means you cannot claim a deduction if you have been reimbursed for the expense.
Calculating Work From Home Expenses
There are now three ways to calculate your expenses
- Shortcut Method ─ claim a rate of 80 cents per work hour for all additional running expenses
- Fixed Rate Method ─ claim all of these:
- a rate of 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture,
- the work-related portion of your actual costs of phone and internet expenses, computer consumables, stationery, and
- the work-related portion of the decline in value of a computer, laptop or similar device.
- Actual Cost Method ─ claim the actual work-related portion of all your running expenses, which you need to calculate on a reasonable basis.
Work From Home Deduction Shortcut
You can claim a deduction of 80 cents for each hour you work from home due to COVID-19 as long as you are:
- working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls,
- incurring additional deductible running expenses as a result of working from home.
You do not have to incur all expenses listed by the ATO whilst working from home but you must have incurred additional expenses in some of those categories as a result of working from home due to COVID-19.
If you use the shortcut method to claim a deduction for your additional running expenses, you cannot claim a further deduction for any of the expenses listed above.
You must keep a record of the number of hours you have worked from home as a result of COVID-19. Examples are timesheets, diary notes or rosters.
Links to Government Resources
If you are working from home due to the Coronavirus pandemic you can claim 80 cents worth of expenses incurred per hour rather then calculating the actual expenses incurred.
When making your tax return through MyGov or with your accountant, include the note COVID-19 hourly rate and claim your expenses incurred whilst working from home. If asked, you will have to produce a record of the hours you worked from home through timesheets, diary note etc.