Claiming Working from Home Expenses

Claiming Working from home expenses in your Tax Return for the 2020-2021 Financial year

If you have had to work from home during the past year you may be able to claim some working from home expenses.

There are 3 different methods to choose from when claiming your working from home expenses -

1.       Fixed rate method

2.       Actual cost method

3.       Shortcut method – which is only available for 01 March 2020 to 30 June 2021

Fixed Rate Method

The fixed rate method allows you to claim a fixed rate of 52 cents per hour for each hour that you work from home.

This rate covers the additional running expenses you will incur for electricity and gas, cleaning your home office and the decline in the value of home office furniture and fittings.

On top of this you can claim the work-related portion of the following expenses –

·         Phone and Internet expenses

·         Computer consumables and stationery

·         Decline in Value of depreciating assets other than home office furniture and furnishings

Actual cost method

This method calculates the actual expenses that you incur to produce your income when working from home.

These expenses include –

·         Decline in value of depreciating assets – such as home office furniture and fittings, phones, computers etc…

·         Cleaning expenses - if you use a dedicated are for working.

·         Heating, cooling and lighting

·         Phone and Internet

·         Computer consumables and stationery

To claim any of these expenses you must incur additional running expenses as a result of working from home. You will not incur additional expenses if other members of your household (who are not working from home) are in the same room as you while you are working from home.

Shortcut method

This method was introduced as a temporary method during COVID. It covers the period from 01 March 2020 to 30 June 2021.

Using this simple method, you can claim 80 cents per hour for each hour that you work from home. You cannot claim any other expenses or purchase of new equipment.

All of the methods require record keeping of the hours that you have worked from home in the form of a timesheet, roster or diary. The Fixed Rate Method and Actual Cost Method allow a diary of a four week period that shows the usual pattern of working from home.

A copy of all receipts, bills and other documents that show the additional running expenses that you have incurred should also be kept.

The team here at Bob Reus & Co will be able to work out which method is best suited to maximise your working from home tax deduction.

Written by Sue Lambert

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