Claim a Tax Deduction for your working from home expenses

Employees working from home may be able to claim a deduction for the expenses they incur that relate to their work.

To claim your working from home expenses, you must:

• Be working from home to fulfill your employment duties, not just carrying out minimal tasks, such as occasionally checking emails or taking calls

• Incur additional expenses as a result of working from home.

There are 3 methods you can use to claim your working from home costs. Fixed rate, Actual cost and Shortcut method.

Fixed rate: You can claim the fixed rate of 52 cents for each hour you worked from home. The rate includes the additional running expenses you incur for:

• The decline in value of home office furniture and furnishings – for example, a desk

• Electricity and gas for heating, cooling and lighting

• Cleaning your home office.

You can also claim phone data, internet expenses and decline in value of deprecating assets at the work-related portion, which are not covered by the 52 cents per hour rate.

Actual cost: You work out your deduction by calculating the actual expenses you incur to produce your income when working from home. This may include the following expenses:

• Decline in value of deprecating assets

• Cleaning expenses

• Heating, cooling and lighting

• Phone, data and internet

• Computer consumables

If you don't have a dedicated work area, such as a home office, you will generally only incur minimal additional running expenses.

Shortcut: This temporary shortcut method simplifies how you calculate your deduction for working from home expenses:

• Between 1 March 2020 to 30 June 2020 in the 2019–20 income year

• For the 2020–21 and 2021–22 income years.

Using this method, you:

• Can claim 80 cents per hour for each hour you work from home

• You can't claim any other expenses for working from home, even if you bought new equipment.

The shortcut method covers all your working from home expenses, such as:

• Phone and data expenses

• Internet expenses

• The decline in value of equipment and furniture

• Electricity and gas for heating, cooling and lighting.

The shortcut method includes decline in value of all items. If you choose to use this method there is no requirement to separately calculate the decline in value of equipment or depreciating assets or any other working from home expense.

To continue to claim deductions for working from home expenses after 30 June 2022 you will need to use either the: Fixed rate and actual cost method.