If you are working from home, you are eligible to claim a deduction for the expenses you have incurred in relation to your work.
Eligibility to Claim
To claim this deduction, you must fulfill all employment duties whilst working at home, not just answering phone calls or checking emails. As a result of working from home, you must incur any other additional expenses too.
As a result of working from home, you can claim a deduction for the additional running expenses used within your home. This includes your phone expenses, electricity expenses, internet expenses and the devalue of office furniture and other items used to support your work, such as your laptop.
If your employer covers your working from home expenses, this must be included in your tax return.
If you’re the owner of the business and working from home, see deductions for home-based business expenses for more information.
In limited situations, you may also claim the occupancy expenses.
How to claim work from home expenses
You must choose one of the following methods that suits your circumstances to calculate your deduction:
- Fixed rate method
- Actual cost method
- Shortcut method (only available from March 1, 2020, to June 30, 2022)
Please refer to the Home office expenses calculator for further assistance in calculating your work-related expenses.
Expenses you cannot claim
If you’re an employee working from home, you cannot claim a deduction for the following expenses:
- Coffee, tea, and milk – even if this is provided by your employer at work
- Payments made towards your child/ren’s education for example, iPads, online learning subscriptions etc
- Items provided by your employer whether it be a phone or a laptop
- Items that have been reimbursed to you or paid for by your employer
Occupancy Expenses
Occupancy expenses are the expenses you pay to rent, own, or use your home. This includes land taxes, mortgage interest, rent, house insurance premiums as well as council and water rates.
Generally, if you are an employee working from home, you are ineligible to claim occupancy expenses and there will be no capital gains tax (CGT) implications for your home.
You can claim occupancy expenses if you can show that your employer could not provide an alternative place for you to work besides your own home, ensuring that your home is exclusively used for work purposes and is incapable for any other uses.
If you only use that particular area of your home for work for parts of the year, you are required to apportion your expenses on a timely basis.
For more information about these measures click here. Or if you need assistance with preparing your tax return and claiming your working from home expenses, give us a call to discuss them further on 07 3367 0852.