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Tax Deductions for working from home

Updated: Feb 22, 2023

The Tax Office has made an important change to the way many people will claim a tax deduction for working from home.


There are now only two methods you can use to claim a tax deduction for working from home.


The actual method


To use the actual method means you keep all of the invoices/receipts in relation to running your home. You calculate your tax deduction as a portion of the total of the expenses – often based on floor area. Under this method, you must have a part of your house set aside exclusively for your work. This method has not changed.


The new 67 cents per hour method


The new, 67 cents per hour method, has just been announced by the Tax Office. Under this method you multiply the number of hours you worked at home by 67 cents. You use this method to claim for:


  • Energy expenses (electricity and gas); and

  • Internet expenses; and

  • Mobile and home phone expenses; and

  • Stationery and computer consumables.


You do not need to set aside a part of your house exclusively for work to use this method. Also, more than one person in the house can use this method.


Important - records you must keep


If you want to use the new 67 cents per hour method, from 1 March 2023, you are required to keep actual records of the hours you work at home.


So, for the tax year ending 30 June 2023, you need to keep:

  • A record which is representative of the total number of hours worked from home during the period from 1 July 2022 to 28 February 2023; and

  • A record of the total number of actual hours you worked from home for the period 1 March 2023 to 30 June 2023. An estimate of the hours in this period will not be accepted by the ATO. You must keep a daily record of the hours worked.


Also, if you want to use the new 67 cents per hour method, you must keep at least one monthly or quarterly bill or other invoice to show that you actually incur expenses for energy, internet, phone, stationery and computer consumables. These records are not used to calculate your deduction. You retain the records to prove that you incur the expense. The Tax Office may ask you to produce these records.


If you have any questions about claiming a tax deduction for working from home, please contact your client manager.





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