UPDATE: Working From Home Deductions

UPDATE: Working From Home Deductions

Starting from the 2023 financial year, there are new rules for keeping records and calculating deductions for people who are working from home. There are now two ways to work out your deductions: the actual cost method and the revised fixed rate method. The revised fixed rate method has been changed to make it easier for people to calculate their expenses and avoid complicated calculations.

Using the revised fixed rate method, you can claim 67 cents for every hour you work from home. This covers things like; electricity, gas, phone and internet usage, computer consumables, and stationery. You can also claim the work-related portion of any equipment you bought for your home office, like furniture or technology.

You don’t need to have a dedicated home office space to use the revised fixed rate method, and businesses that operate from home can also use it to claim home-based business expenses.

To use the revised fixed rate method, you must keep a record of the total number of hours you worked from home, as well as evidence that you paid for the expenses covered by the fixed rate method, like phone or electricity bills. You also need records for any equipment you bought to work from home.

Please feel free to download and use the document below to record the hours you worked from home.

Work From Home Diary

The Key ‘take home’ Points:

New rules for tax deductions on working from home expenses from the 2023 financial year.
Dedicated workspace no longer required to claim deductions.
Depreciation on work assets such as office furniture and technology can be claimed.
Two calculation methods are available: actual cost method and revised fixed rate method.

Revised Fixed Rate Method Highlights

Expenses covered under the revised fixed rate method: electricity, gas, phone, internet, computer consumables, and stationery.
Rate for revised fixed rate method increased from 52 cents to 67 cents per hour worked from home.
Businesses that operate from home can also use the revised fixed rate method.
To use revised fixed rate method, records of hours worked and expenses.

If you have worked from home during the 2024 financial year, contact us to discuss your situation further as you are likely to be affected by the above changes.

Additional Resources:

ATO Instructions for claiming deductions using the revised fixed rate method or actual cost method, click here.