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Tax time help: claiming WFH expenses

Having employees work from home (WFH) during lockdown has allowed many organisations to continue operating, and the uptake of salary packaging benefits like portable electronic devices and home office expenses has soared. For those unable to package, the ATO has simplified the claiming of these and other WFH expenses. Here’s what you and your employees need to know.*  

Some WFH expenses that can be claimed as deductions at tax time include:   

• Home office equipment like a laptop or computer, printer, phone or furniture. Note, if these items have been salary packaged, they cannot be claimed again at tax time  
  • Claim the full cost of equipment up to $300 
  • Claim the decline in value of equipment over $300 
• Computer consumables (printer ink and paper) and stationery
• Costs associated with phone and internet connection
• The cost of electricity used to heat, cool and light the dedicated workspace, as well as running the items used for work. Cost for cleaning this area can also be claimed. 

For a full list of expenses that can or cannot be claimed, as well as any exceptions and applicable rules that may apply, please see the ATO website.  

What’s the new ‘shortcut’ method of claiming?  

For employees working from home during the lockdown period, the ATO has made it easier to claim deductions on expenses incurred to “fulfil your employment duties”. This method allows employees to claim a deduction of 80 cents per hour for eligible expenses (such as those outlined above) incurred between 1 March and 30 June 2020. 

In the section on ‘Working from home during COVID-19’ on the ATO website, the criteria for claiming via the shortcut method is laid out, along with eligible expenses, recordkeeping requirements (albeit minimal), a simple formula for calculating deductions, and how to include these in tax returns. 

The website also provides helpful information for calculating and claiming eligible expenses incurred outside the designated ‘shortcut’ claim period.

*The information contained in this article is general in nature and does not constitute financial or personal advice. We recommend you consider your own objectives, financial situation and needs, and, take the appropriate legal, financial or other professional advice based upon your own particular circumstances.