Working from home? You can claim related costs as a cents-per-hour worked method. ATO allows a claim of 70c per hour worked from home. Here’s how it works and where people go wrong.
What’s included in the 70c
The rate covers occupation cost, electricity and gas, home internet, phone usage, and stationery. If you claim the 70c rate, you cannot claim any of those expenses separately, the ATO treats them as already included. Claiming your internet bill on top is not allowed. You can claim your mobile phone for portion used outside of home, e.g. during client visits.
What’s not included and can be claimed separately: Asset depreciation is not covered by the 70c rate. You can claim the work-use portion of:
- Laptop or desktop computer
- Monitor
- Desk and chair (if over $300; under $300 is an immediate deduction)
- Repairs to home office equipment
- Cleaning of a dedicated office space
So 1,150 hours × $0.70 = $805 from the fixed rate. Add depreciation on a $1,200 laptop and a $400 chair and you’re looking at another $450 or so on top of that.
Record-keeping requirements: The ATO no longer accepts estimates. Since 1 July 2022, you need a contemporaneous record of every hour worked from home, a spreadsheet, calendar entries, a timesheet. An end-of-year reconstruction won’t hold up. You also need to keep at least one bill for each expense type covered by the rate (one electricity statement, one internet invoice, one phone bill) to show you actually incurred the costs.
If you’re not sure which method suits your situation, or whether your records are in order before you lodge, call us on 02 9386 0500 or get in touch with the BTMH team.
