Impact HR Blog


Working from Home: Tax Deductions

28 May 2020

With many businesses closing office doors in light of Covid-19, you are probably working from home. The end of the financial year is fast approaching, and you might want to start looking into the items you can claim while working from home.

The good news is, to help us manage this period, the ATO have released a new working from home shortcut to make it easier for people to claim deductions for working from home.

The new arrangement will allow people to claim a rate of 80 cents per hour for all their running expenses, rather than needing to calculate the costs. For most people, this will be a much quicker and simpler process. 

Multiple people living in the same house can claim this new rate. For example, a couple living together could each individually claim the 80 cents per hour rate. The requirement to have a dedicated work from home area has also been removed. Making it useful for those individuals forced to work on the dining room table while juggling home schooling or a toddler at home or sharing space with a partner.

 You can choose this method if you: are working from home to fulfil your employment duties, not just carrying out minimal tasks such as occasionally checking emails or taking calls and have incurred additional running expenses as a result of working from home.

The short cut method covers all your work from home expenses, such as: phone expenses, internet expenses, the decline in value of equipment and furniture, electricity and gas for heating, cooling and lighting. It is important to note that if you claim this method, you can’t claim any other expenses for working from home.

The short cut will be available for the period 01 March 2020 until at least 30 June 2020 – This may be extended depending on when work patterns start to return to normal. If you use the short cut method, you must include the note ‘COVID hourly rate’ in your tax return.

You don’t have to use the shortcut method; you can choose to use one of the existing methods to calculate your deduction. It is best to choose the method that gives you the greatest outcome.

 Hopefully, this short summary provides some assistance as you start to think about the end of the financial year. If you are new to working from home, this short cut method should provide a quick and easy way for you to claim.

 For further details please check out the ATO website.

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