The Australian Taxation Office (ATO) have announced the finalised changes to working from home deductions which apply from 1 July 2022. The changes replace the shortcut and fixed-rate allowance for working from home and set the scene for post-COVID WFH tax deductions.

Fixed rate method changes

From 1 March 2023 you must keep a record of all hours worked from home when claiming your expenses. The ATO will not accept estimated hours. You will also have to keep records of the expenses incurred under the rate, such as power and internet invoices.

The fixed rate method doesn’t require you to have a dedicated home office space.

The fixed rate: 67 cents per hour working from home (previously 52 cents)

This rate covers:

• Electricity and gas
• Internet, mobile and landline usage
• Stationery and computer consumables.

If you use the fixed rate method, you cannot claim any further deductions on the above, however you can still claim depreciation on computers and office furniture, as well as any repairs, maintenance of said assets and cleaning of your dedicated home office. You can use the myGov depreciation and capital allowances tool to calculate depreciation, or speak to one of our accountants to calculate this for you.

Actual cost method

There are no changes to the actual cost method but as always, you must ensure you keep accurate records.

Using either of the above methods, when you purchase an asset or piece of equipment for over $300, you can’t claim the full amount in total, your deduction must be claimed over multiple years.

If you have any questions about claiming work from home expenses or require any assistance with your deductions or tax return, please contact us today.