Working from Home Tax Deductions Australia

For some reason, you can find yourself working from home, maybe because your work office is full or any other reason. When you work from home, you are likely to incur additional costs like heating, electricity, and internet. If you are such an employee, you can claim a deduction for expenses you incur that relate to your work. You can make work from home claim through the Australian Taxation Office (ATO) online portal.

In this article, we are going to highlight what working from home tax deductions are, eligibility and how to claim them.

Who is Eligible for Australia Work from Home Tax Deductions?

To be eligible for working from home tax relief in Australia, you must:

  • Be working from home to fulfill your employer’s duties
  • Have personally spent the money and it was not reimbursed by the employer
  • Claim for an expense directly related to your earned income
  • Possess documents to support the claim

What Expenses Can I Claim On?

You can make a claim for working from home tax deductions for the following expenses:

  • Heating, cooling, internet, and lighting expenses
  • Phone and emailing expenses
  • Accessories’ consumables like printer ink and stationery

In limited circumstances, you can claim occupancy expenses. However, you must prove that it was necessary for you to work from home because your employer cannot provide you with a place to work from. Also, you must prove that you use your home exclusively for work purposes and isn’t used for other purposes. 

Read also: Capital gains tax on property Australia. 

What Expenses You Cannot Claim For

You cannot make a claim for working from home tax relief if:

  • Your employer provides the necessary items
  • Expenses where you have been reimbursed by your employer
  • Snacks and refreshments
  • Rent and mortgage interest rates

How to Calculate Working from Home Tax Deductions

There are two methods you can use to claim working from home tax deductions in Australia. They include:

1. Fixed-rate method. You can claim a tax deduction at a fixed rate of 52 cents for every hour you work from home. The rate includes additional expenses like electricity, gas, cooling and lighting expenses, and costs of cleaning your working area.

You need to keep a record of the number of hours you worked from home during the year. You need to have receipts or written evidence of the amount you spent. You also need to have a diary showing your work-related internet use and the percentage of the year you use depreciating assets exclusively for work.

2. Actual cost method. The other method to calculate deductions for tax working from home Australia is claiming actual expenses you incur as a result of working from home. You can include expenses like cleaning expenses, heating, cooling, and lighting expenses, phone, data, and internet, cleaning expenses of your home office, and computer consumables. Add all the receipts and then you can proceed to use the home office expenses calculator.

Summary of Working from Home Tax Relief Australia

If you work from home for reasons like unavailability of working space on your employees' premises, then you can claim working from home tax deductions. However, you must prove that the expenses you are claiming are directly related to you working from home. You must keep a record of all the expenses.

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This article was updated on December 1, 2022

Vincent Nyoike

Vincent Nyoike is an experienced business consultant and financial analyst. He is a CPA and is currently pursuing a Master of Science in Finance and Accounting at JKUAT. He holds a B.Sc. in Applied Statistics from the University of Eldoret