Employees Working from home deduction changes for 2022–23

The record keeping requirements and methods for calculating working from home deductions has changed for the 2022–23 income year onwards.

The shortcut method of calculating work from home of 80cents per hour will cease from 2022 tax returns.

From the 2022–23 income year, the methods available to calculate working from home deductions are the:

• revised fixed rate method
• actual cost method.

While the actual cost method remains unchanged, the revised fixed rate method has been updated to better reflect contemporary working from home arrangements, making it easier to calculate expenses and avoid time-consuming apportionment calculations.

To calculate actual cost method, determine the work from home percent of total electricity and gas, the work from home percent of phone and internet, and work related percentage – date of invoice home office equipment expenses.

The revised fixed rate method:

• has increased from 52 cents to 67 cents per hour worked from home
• removes the requirement to have a dedicated home office space
• works out the claim for
  • electricity and gas
  • phone and internet usage
  • computer consumables
  • stationery
• allows taxpayers to separately claim the work-related portion of the decline in value of depreciating assets – such as office furniture and technology.

 

If you wish to use the revised fixed rate method for their 2022–23 tax return, you need to have:

• from 1 July 2022 to 28 February 2023 – a record which is representative of the hours you worked from home
• from 1 March 2023 to 30 June 2023 – a record of the total number of hours you worked from home (such as a timesheet, roster or diary) as well as evidence they paid for each of the expenses they incurred that are covered by the fixed rate method (for example, a phone or electricity bill). They will also need records for any equipment they bought to work from home, like technology or furniture (which provides details of the supplier, cost, date acquired).