Working from home definitely has its perks. The ‘commute’ from bed to shower to office, for one.

But working from home may also mean that you incur extra work expenses that you normally wouldn’t if you were office-based.

The good news? You can claim tax deductions on some things while working from home due to COVID-19.

A man working from home, using his laptop.

Expenses you can claim

According to the Australian Taxation office (ATO), people working from home are able to claim the following ‘running expenses’:

  • electricity expenses associated with heating, cooling and lighting the area from which you are working and running items you are using for work
  • cleaning costs for a dedicated work area
  • phone and internet expenses
  • computer consumables (for example, printer paper and ink) and stationery
  • home office equipment, including computers, printers, phones, furniture and furnishings – you can claim either the:
    • full cost of items up to $300
    • decline in value for items over $300.

Find out how to calculate running expenses.

A laptop and glasses on a table.

Things you can’t claim

You’re unable to claim expenses related to occupancy, like your mortgage interest, rent or rates.

You also can’t claim general household items your employer might normally have provided you with at the office, such as milk and coffee.

How to calulate your claims

Calculating expenses can be tricky at the best of times. So the ATO has introduced a simplified ‘shortcut method’ of calculating extra expenses incurred from 1 March 2020 until at least 30 June 2020.

Under this method, you can claim an 80c deduction for every hour you work from home due to COVID-19. The ATO says you can only do this if 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.

The shortcut method covers deductible running expenses, including:

  • electricity used for lighting, heating or running your computer
  • decline in value for home office furniture
  • phone costs
  • internet costs
  • printer ink
  • stationery.

See the ATO’s full list of deductible running expenses.

Record keeping

When claiming any tax deduction, you must keep records.

If you use the shortcut method, you’ll only need to keep a record of the hours you work from home. You can do this by using a spreadsheet or keeping a diary.

If you choose to claim expenses using different methods, you’ll need to record not only your hours worked from home, but also detailed records of all expenses e.g. receipts and utility bills.

Find out more about record keeping when claiming home office expenses.

Ask the experts

If you would like further advice on what you can and can’t claim, have a phone or Zoom chat with your accountant. They’ll be able to talk through your unique situation, and provide you with tailored advice.