Date posted: 30/07/2020 3 min read

COVID-19 tax time: What you need to know about working from home expense claims

Each year, the Australian Taxation Office (ATO) pays out tens of billions of dollars in tax deductions, the highest being for work-related expense claims and rental claims.

In Brief

  • In response to the social distancing restrictions brought about by COVID-19, many Australians are working from home
  • The ATO has introduced a temporary shortcut method for taxpayers to claim working from home expenses
  • The change will apply to expenses made between 1 March and 30 September 2020

In the 2017-18 financial year, there were almost 9 million taxpayers claiming a total of $21.7 billion in work-related expenses.

Given the sheer volume of people required to work from home due to COVID-19, the ATO has introduced a shortcut method for determining deductible home office expenses.

The shortcut method rate of 80c is only applicable to hours worked from home from 1 March 2020, and unless extended, will apply to 30 September 2020.

Claims prior to 1 March 2020 will need to be calculated using the fixed rate of 52c per hour, or the actual running expense method. For these claims, more costs (e.g. computer consumables) are excluded, but you must have a separate work area.

To lodge a claim for home office expenses, you must be working from home and incurring additional running expenses related to utilities, electricity, gas, phone and internet.

For equipment such as printers, stationery, computers or telephones, you can claim the full cost (for items valued up to $300) or you can claim for the depreciation in value (for items over $300).

Work-related vehicle and travel expenses, as well as self-education courses are still tax deductible provided you meet the criteria.

For more information and guidance around what COVID-19 working from home expenses you can claim at tax time, download our checklist below.