For the 2019–20 income year, there are three ways of calculating home office expenses depending on your circumstances as tax deductible expenses on your tax return. The methods are the:
• Shortcut method (80 cents) – only available 1 March to 30 June 2020 (Note: this method can also be used during the period from 1 July 2020 to 30 September 2020 but that period that will fall into the 2020–21 income year). You can claim a deduction of 80 cents for each hour you worked from home in the 2019–20 income year during the period 1 March to 30 June 2020 as long as you:
- were working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls
- incurred additional running expenses as a result of working from home.
• Fixed rate method (52 cents) - You can claim a deduction of 52 cents for each hour you work from home for the work-related expenses you incur for additional running expenses. To use this method, you need to have a dedicated work area, such as a home office when you work from home.
To claim the work-related portion of these expenses you must have records such as:
- receipts or other written evidence that shows the amount spent on expenses and depreciating assets you purchased
- phone accounts identifying your work-related calls and private calls to work out your percentage of work-related use for a representative period
- a diary that shows a representative four-week period of your usual pattern of working at home
- any small expenses ($10 or less) that you can't get a receipt for totalling no more than $200
- your work-related internet use
- the percentage of the year you used depreciating assets exclusively for work.
• Actual cost method - Under the actual expenses method, you can claim the additional running costs you directly incur as a result of working from home. This may include the following expenses:
- electricity and gas for cooling, heating and lighting
- the decline in value of home office furniture (desk, chair) and furnishings,
- the decline in value of phones, computers, laptops or similar devices
- phone expenses
- internet expenses
- cleaning (if you use a dedicated area for working)
- computer consumables and stationery – such as ink