Starting from the 2022-23 financial year, the 80 cents per hour method for calculating work-from-home expenses will no longer be available. Instead, taxpayers can use the new fixed-rate method or the actual cost method to calculate the additional expenses incurred while working from home. To use the fixed-rate method, you must work from home while performing your job or business, incur additional expenses that are deductible under s 8-1 of the ITAA 1997, and keep records of your work hours and expenses.
The fixed-rate method covers energy expenses like electricity and gas, internet, mobile and home phone bills, and stationery and computer consumables. However, it doesn’t include any decline in value of assets used during the financial year or other running expenses not mentioned. The new rate of 67 cents per hour is lower than the old shortcut method, which means that some taxpayers may lose around $100 in deductions going forward.
If you choose to use the fixed-rate method, you cannot claim separate deductions for the expenses covered. You must also keep relevant records of your work hours and expenses. For the 2022-23 financial year, you need to keep a record of your hours worked from home between July 1, 2022, and February 28, 2023, and another record for March 1, 2023, to June 30, 2023. For later years, you need to keep a record of your hours worked from home for the entire financial year.
To claim expenses, you must keep one document for each additional running expense incurred, like energy, mobile, phone, and internet bills. You must also keep receipts for any stationery and computer consumables purchased and documents demonstrating the income-producing use of assets that have lost value.