The ATO has made changes to the way working from home deductions can be claimed by eligible taxpayers for the 2023 income year.
‘Fixed-Rate’ expense method
If you have genuinely worked from home at any time from 1 July 2022 to 30 June 2023, you may be eligible to use the ATO’s revised fixed-rate method.
The fixed-rate method is calculated at 67 cents for each hour worked from home in the 2023 income period.
Using this method, you may be able to claim energy expenses for electricity or gas used for lighting, heating or cooling and for operating electronic items necessary for work or business, internet, mobile and home telephone services as well as the cost of stationery and consumables which might include paper, cartridges and supplies for printers.
‘Actual’ expense method
Alternatively, you could use the ‘actual’ expense claim method for such claims.
When using this method, you must make a separate claim and you can only claim the work-related portion of the expense.
Keep clear records
As you’d expect, the ATO looks very carefully at these type of expenses in context of how they directly relate to how you earn your income.
Whether you choose the revised fixed-rate method or the actual expense method, you will need to keep clear records that substantiate each claim.
As a condition of the revised fixed-rate method, the ATO requires a timesheet or diary record of your work from home hours over the income year as follows:
From 1 July 2022 to 28 February 2023
The ATO will generally accept a record of the number of hours worked from home over a representative period (e.g. a diary for a four-week period). This can then be used to estimate the total number of hours worked for this entire period of time; then
From 1 March 2023 (ongoing)
You will need to keep a record of the ‘actual’ hours worked on every occasion you work from home.
Record keeping for this purpose is straight forward and you can click here to access our Working From Home Diary Record sample.
Next steps
Decide whether the fixed-rate or actual work from home expense claim method is best for you.
If you choose the fixed-rate method compile records that are ‘representative’ of your work from home activities between July 2022 to February 2023. Then, from March 2023 keep a diary or timesheet as a record that substantiates the hours worked from home when calculating the per hour fixed-rate expense claim.
