ATO announcement to “new working from home rules”

Please note this new method is effective from 1 March 2020 to 30 June 2020. It will then be reviewed.

The ATO has just announced a relaxation to the normal working from home rules and introduced a new 80 cent per hour fixed rate to cover ALL deductions.

 There are now three ways you can choose to calculate your additional running expenses:

• shortcut method ”" claim a rate of 80 cents per work hour for all additional running expenses

• fixed rate method ”" claim all of these:

  • a rate of 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture,
  • the work-related portion of your actual costs of phone and internet expenses, computer consumables, stationery, and
  • the work-related portion of the decline in value of a computer, laptop or similar device.

• actual cost method ”" claim the actual work-related portion of all your running expenses, which you need to calculate on a reasonable basis.  

Under the SHORTCUT method, you can claim a deduction of 80 cents for each hour you work from home due to COVID-19 as long as you are:

• working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls,

• incurring additional deductible running expenses as a result of working from home.

You do not have to have a separate or dedicated area of your home set aside for working, such as a private study.  

The shortcut method rate covers all deductible running expenses, including:

• electricity for lighting, cooling or heating and running electronic items used for work (for example your computer), and gas heating expenses

• the decline in value and repair of capital items, such as home office furniture and furnishings

• cleaning expenses

• your phone costs, including the decline in value of the handset

• your internet costs

• computer consumables, such as printer ink

• stationery

• the decline in value of a computer, laptop or similar device.  

You do not have to incur all of these expenses, but you must have incurred additional expenses in some of those categories as a result of working from home due to COVID-19.

If you use the shortcut method to claim a deduction for your additional running expenses, you cannot claim a further deduction for any of the expenses listed above.

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