Working from home

The fixed rate method for calculating your deduction for working from home expenses has been revised. The revised fixed rate method is 67 cents per work hour and available from 1 July 2022.

The fixed rate method has been revised to:

  • increase the rate per work hour that you can claim when you work from home
  • change the expenses the rate covers
  • change the record keeping requirements
  • remove the requirement to have a home office set aside for work.

You can also separately claim a deduction for the work-related use of depreciating assets such as office furniture and technology.

If you don’t use the revised fixed rate method, you need to use the actual costs method. You can no longer use the shortcut method.

Eligibility to use the revised fixed-rate method

You do not need to have a separate home office or dedicated work area set aside in your home.  You must however be working from home while carrying out your employment duties

or while carrying on your business on or after 1 July 2022 and the work has to be substantive and directly related to your income-producing activities.

You are not required to demonstrate that you have incurred additional running expenses as a result of working from home. Records of the hours you worked from home during the income year and invoices or bills in the name of the home owner or service recipient represent evidence additional running expenses have been incurred. Where invoices and bills are in the name of one member of the household but the cost is shared, each member of the household who contributes to the payment of that expense will be taken to have incurred it.

You must keep:

records showing the total number of hours you worked from home during the income year and one document (e.g. an invoice, bill or credit card statement), for each of the listed running expenses which you have incurred during the income year.  In addition, if you claim a deduction for the decline in value of depreciating assets used while working from home you must keep records which demonstrate their income-producing use.

The ATO will no longer accept an estimate based on hours worked during a shorter period during the income year.

Important — For the 2022–23 income year only, you must keep a record which is representative of the total number of hours worked from home during the period 1 July 2022 to 28 February 2023, and a record of the total number of actual hours worked from home for the period 1 March to 30 June 2023.

For the 2023–24 and later income years, you must keep a record for the entire income year of the number of hours worked from home. The record can be in any form provided it is kept contemporaneously. The records may be kept in the following forms:  timesheets; rosters; logs of time you spent accessing employer systems or online business systems; time-tracking apps; a diary or similar documents.

The revised fixed-rate method apportions the following additional running expenses on a fair and reasonable basis by using a fixed rate of 67 cents per hour for each hour a taxpayer worked from home during the income year:

  • energy expenses (electricity and gas) for lighting, heating, cooling and electronic items used while working from home.
  • internet expenses.
  • mobile and home phone expenses.
  • stationery and computer consumables.

The revised fixed-rate method does not cover the decline in value of depreciating assets.