Tax Deduction | working from home

If you’re looking at claiming a deduction for working at home due to being affected by the COVID-19 virus, now you can.

The ATO have advised that during the period from 1 March 2020 to 30 June 2020, you can use the “shortcut” method and apply a fixed rate of $0.80 per hour for all additional running expenses.

Additional running expenses are:

  • electricity expenses associated with heating, cooling and lighting the area of which you are working and running items your are using for work;
  • cleaning costs for dedicated work area;
  • phone + internet expenses;
  • computer consumables {for example ink, paper} + stationery;
  • home office equipment including computers, printers, phones + furniture + fittings

In order to claim the “shortcut” method, 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.

NB: if you choose the shortcut method to claim a deduction, you must state “COVID-hourly rate” when lodging your return with the ATO.


Claiming the ACTUAL COST METHOD

If you decide to claim the “actual cost method” AND not use the $0.80 per hour as above, then you need to determine the “separate or dedicated area of your home set aside for working” i.e. m2.

You need to ensure that:

  • you must keep copies of all receipts relating to the costs;
  • you cannot claim a deduction if your employer has reimbursed you for any of the costs stated above;
  • any item that costs >$300 must be depreciated over the life of the asset;
  • calculate the “work-related” portion only i.e. DO NOT include the private portion.

If you would like assistance or clarification on the above, reach out to the team @HKSRussell who would be more than happy to assist.

Stay safe + strong.

Charisse Russell
Charisse Russell | Director + Advisor + Mentor