I’ve been working at home for around 6 weeks now due to Covid-19 and incurring extra running costs. How do I calculate these deductions?

The ATO has introduced a temporary simplified method which allows you to claim 80 cents for each hour you are working at home and this covers all deductible running expenses which are:

  • Heating
  • Cooling
  • Lighting
  • Cleaning
  • Decline of value of furniture used for business
  • Phone
  • Internet costs

This is an increase from 52 cents per hour. The new rate is back dated to 1 March 2020 and is in place until 30 June 2020 when it will be reviewed. For example, if the business you work for closed from the 16th March 2020 and asked all employees to work from home, you can claim from this date. You just need to record all your hours worked since that date in a timesheet as evidence of your claim.

For houses where there are multiple people working there, they can all individually claim the increased 80 cents per hour rate.

You can also claim expenses for any new equipment such as a laptop, office desk and chair and any additional stationary – just keep all your receipts. If, however, your company has reimbursed you for those costs, you cannot claim them as an expense.

If you are used to working from home and would prefer to use one of the existing methods for claiming deductions, including calculating your actual running expenses, you can continue to do so.

The ATO has recognised that a lot of people are working from home for the first time, so this is an easier method of calculating expenses due to Covid-19.

When you complete your tax return for 19/20 you will need to provide us with your timesheets as evidence of your time working at home, so don’t forget to do them!

If you have any questions please get in touch