If you worked from home during lockdown and spent money on work related items that were not reimbursed by your employer, you might be able to claim some of these expenses as a deduction – but not everything you purchase can be claimed.
If you are claiming your expenses, there are three methods you can use:
- The ATO’s simplified 80 cents per hour short-cut method – you can claim 80 cents for every hour you worked from home from 1 March 2020 to 30 June 2021. You will need to have evidence of hours worked like a timesheet or diary. For example, if you worked from home for 7 hours a day on the weekdays from 1 August to 30 November 2020, that’s 84 working days (in NSW) or 588 hours. Using the 80 cents COVID hourly rate, you could claim $470.40. The rate covers all of your expenses and you cannot claim individual items separately, such as office furniture or a computer.
- Fixed rate 52 cents per hour method – applies if you have set up a home office but are not running a business from home. You can claim 52 cents for every hour and covers the running expenses of your home. You can claim your phone, internet, or the decline in value of equipment separately.
- Actual expenses method – you can claim the actual expenses you incur (and reduce the claim by any personal use and use by other family members). You will need to ensure you have kept records such as receipts to use this method.
Here’s an example calculation:
NSW, QLD, VIC – 84 days, 588 hours = $470.40
ACT, SA, NT, TAS, WA – 85 days, 595 hours = $476
It’s this last method, the actual method, the ATO is scrutinising because people using this method tend to lodge much higher claims in their tax return. The ATO has highlighted four ineligible expenses that are being claimed:
- Personal expenses such as coffee, tea and toilet paper
- Expenses related to a child’s education, such as online learning courses or laptops
- Claiming large expenses up-front (instead of claiming depreciation for assets), and
- Occupancy expenses such as rent, mortgage interest, property insurance, and land taxes and rates, that cannot generally be claimed by employees working from home.
If you might be claiming Work From Home in your tax this year, give the TSP team a call on 49264155 or email email@example.com to check over your eligible calculations.