Understanding your work from home deduction claim using the fixed rate method.
Have you ever received an individual tax checklist from your accountant at Roberts + Morrow asking for your work from home hours to claim a tax deduction?
✅ Yes
Well, we have summarised the most common questions we get to hope to help you answer that question!
But first what is the Fixed rate method?
From 1 July 2022 there are only two methods the ATO allows you to claim work from home deductions. Fixed rate or actual method.
The most common method to use for employees is the Fixed Rate method as it is the simplest to calculate.
The fixed rate the ATO has set is 67 cents / hr and includes the following expenses that are often difficult to apportion correctly:
- data and internet
- mobile and home phone usage
- electricity and gas
- computer consumables (for example, printer ink)
- stationery
Most Common Question about the fixed rate method:
Question
I use my mobile phone for both my home office and at the work office. If I claim the fixed rate method for my home office usage, can I claim a portion of my mobile phone bill for the time I am at the work office.
ATO Answer: ❌
No. You can’t claim a separate deduction for any of the expenses the fixed rate includes.
The fixed rate includes mobile phone usage and therefore we are unable to claim a separate mobile phone claim for usage outside the home office.
Question
I don’t have an office space but use my kitchen table when I am working from home can I still claim the fixed rate method.
ATO Answer ✅ Yes You don't need a dedicated home office to use this method.
Question
I have set up my home office and bought new office furniture (desk, chair, a new computer) can I claim a deduction for these assets?
ATO Answer ✅ Yes. You can separately claim a deduction for the work-related use of technology and office furniture such as chairs, desks, computers, bookshelves.
You can claim the full deduction if the item is under $300 otherwise the asset must be depreciated.
The ATO lists the following Items that you can claim for as well as the fixed rate.
- the decline in value of assets used while working from home, such as computers and office furniture
- the repairs and maintenance of these assets
- cleaning (if you have a dedicated home office).
Question
I work from home once a week and a few hours maybe sometimes on the weekend. Can I just calculate an average of my home office hours based on this for the fixed rate?
ATO Answer ❌ No. The ATO’s view is you must have correct records before claiming a working from home deduction. Their stance is If you don’t have records, don’t claim the expense.
For the fixed rate method, you need to keep the following records.
- a record of all the hours you work from home for the entire year (for example, timesheets, rosters, or a diary)
- Evidence you paid for the expenses covered by the fixed rate method (for example, if you use your phone and electricity when you work from home, keep one bill for each of these expenses)
- records for any depreciating items you claim as a separate deduction (for example, a computer or office furniture).
For more information regarding the fixed rate method or the actual method please refer to this ATO fact sheet.
Working from home deduction (PDF, 777 KB)This link will download a file.
