Working from home expenses

As we come to the end of this financial year, the massive changes to working lives around COVID-19, means many employees are now working from home.

The ATO has released some information for employees regarding claiming some expenses incurred when working from home.

It’s important that as an employee, you are aware of this information and know what you can and cannot claim. If you are working from home, it’s possible some of these expenses are going to be reimbursed by your employer.
But whether you make the claim, or your employer reimburses you, to claim a deduction for working from home, the following must apply:

  • You must have spent the money.
  • The expense must be directly related to earning an income.
  • You must have a record to prove it.

This also means you cannot claim a deduction for items provided by your employer.
If expenses are not reimbursed by your employer, but instead you receive an allowance to cover these expenses when working from home, you:

  • must include this allowance as income in your tax return.
  • can claim a deduction for expenses incurred

If you work from home, you will be able to claim a deduction for the additional running expenses you incur.

These include:

  • electricity expenses associated with heating, cooling and lighting the area from which you are working and running items you are using for work
  • cleaning costs for a dedicated work area
  • phone and internet expenses
  • computer consumables (for example, printer paper and ink) and stationery
  • home office equipment, including computers, printers, phones, and furnishings – up to $300 or a decline in value for items over $300.

Expenses you can’t claim
If you are working from home only due to COVID-19, you:

  • cannot claim occupancy expenses such as mortgage interest, rent and rates
  • cannot claim the cost of coffee, tea, milk and other general household items an employer may otherwise have provided you with at work.

But remember, the main criteria for working from home is that you are fulfilling your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls.

You must have incurred additional expenses in some of those categories as a result of working from home due to COVID-19.

You must keep a record of the number of hours worked from home as a result of COVID-19. Examples are timesheets, diary notes or rosters.

If you want help in calculating your running expenses, please give us call.