Due to COVID-19 many of us are working from our home office which is presenting many with a significant adjustment to our ‘normal’ routine and lifestyles. Along with these lifestyle changes it is also likely your daily running costs of the household have also increased as a result of working from home.
The Taxation Office has identified this increase in costs and offered those taxpayers who are working from home a shortcut Home Office calculation method with an increased allowable tax deduction rate until work patterns are able to return to normal post COVID-19 pandemic.
The Home Office fixed rate method for the 2019/20 financial year is 52 cents per hour you work in your home – this includes electricity, depreciation of office equipment and cleaning. You are also able to claim your work % of your business use for phone, internet and stationery in addition to this.
With the COVID-19 shortcut method you are able to claim 80 cents for each hour you work from home between 1 March 2020 until at least 30 June 2020 – This includes electricity, depreciation of office equipment and devices, cleaning, phone, internet and stationary. You are not able to claim your work use for phone, internet and stationery in addition to this hourly rate.
In summary, there are three ways you can choose to calculate your additional running expenses:
- Actual cost method
- Fixed rate method (52 cents per hour for heating, cleaning, depreciation of office furniture etc PLUS the work related portion of phone, internet, stationery, deprecation of computer/devices)
- Shortcut method (80 cents per hour)
For more details information on Home Office expenses claimable please refer the Taxation office resource by clicking this link.