ATO finalises revised fixed rate for work from home expenses

Natasha Gardner

The Australian Taxation Office (ATO) has refreshed the way that taxpayers claim deductions for costs incurred when working from home.

Whilst these changes take effect from March 1st 2023 they will be effective from July 1st 2022.

Key changes between the previous and revised fixed rate are:

  • an increased rate – from 52 cents to 67 cents per hour worked from home 
  • removal of the requirement to have a separate home office or dedicated work area.
  • inclusion of phone and internet expenses as well as electricity and gas usage, computer consumables, and stationery costs. 
  • taxpayers will now separately claim the decline in value of work-related equipment, office furniture, and any other running expenses not covered by the rate per hour.

Revised fixed-rate method

The revised fixed-rate method apportions the following additional running expenses you incur on a fair and reasonable basis by using a fixed rate of 67c per hour for each hour you worked from home during the income year:

  • Energy expenses (electricity and gas) for lighting, heating, cooling, and electronic items used while working from home
  • Internet expenses
  • Mobile and home phone expenses, and
  • Stationery and computer consumables.

The rate per hour calculates the total of your deductible expenses for energy, internet, mobile and home phone, and stationery and computer consumables for the income year.

This means you cannot claim an additional separate deduction for any of these expenses.

“Australians will need to keep an ongoing diary for each day of the year they work from home from March onwards. A four-week diary representative of the year isn’t going to cut it. They also need to keep some records about their expenses incurred while working from home, such as copies of utility bills.

“Start keeping those diaries now.”