Changes to working from home deductions

Following the recent announcement by the ATO, employees who claim the fixed-rate work from home method are being advised to keep strict records of their hours. 

The ATO has released a number of changes to its working from home deduction methods.  While the ‘actual cost method’ remains unchanged, employees claiming the ‘fixed-rate method’ will now claim at an increased rate from 52 cents to 67 cents per hour worked from home. 

The newly increased rate also removes the requirement to have a dedicated home office space, and includes provision for electricity and gas, phone and internet usage, computer consumables and stationery.  Items such as tea, coffee, milk and general household items are not covered, nor can they be claimed separately, even if employers provide them in the workplace.

Employees can also continue to claim the work-related portion of the decline in value of depreciating assets such as office furniture and technology under the fixed-rate method. 

Employees planning to use the fixed-rate method for your 2022-23 tax return need to be aware of the changes to the method’s record keeping requirements before lodgement:

  • From 1 July 22 to 28 Feb 2023 records which are representative of the hours worked from home are acceptable (e.g. 1 months diary of hours or similar document).
  • From 1 March 23 to 30 June 23 a record of all hours worked from home (e.g. Timesheet, roster or diary) as well as evidence of payment for any other expenses incurred as a result of working from home is required. 

Should you have any queries regarding these changes, please get in touch with your accountant.