Since the COVID-19 pandemic began, many employees have started to work from home as they adapt their schedules and lifestyles.
The Australian Taxation Office (ATO) has changed the work-from-home deductions available to employees in the following way:
- The COVID 80 cents per hour shortcut method has been scrapped.
- The fixed-rate method rate has increased to 67 cents per hour.
The changes announced by the ATO relate to the fixed rate method and apply from 1 July 2022 for 2022/23 income tax returns.
The new fixed-rate method.
The revised fixed rate method can be used from the 2022–23 income year onwards.
Employees using this method cannot separately claim deductions that include:
- Energy – Electricity or Gas
- Stationery
- Computer consumables, such as printer ink
- Internet or phone
- The decline in value of assets used while working from home, such as computers and office furniture.
- The repairs and maintenance of these assets.
- Costs associated with cleaning a dedicated home office.
You can still claim a separate deduction for:
- The decline in value of assets used while working from home, such as computers and office furniture.
- The repairs and maintenance of these assets.
- Costs associated with cleaning a dedicated home office.
Stricter record-keeping rules
In addition to the new rate, stricter rules apply for keeping records of hours worked and from 1 March 2023 onwards, taxpayers will be required to keep a record of the total number of hours they work from home.
Another significant change is that employees will no longer need a dedicated home office to use this method.
If more than one person is working from home at the same time, each person can use the fixed rate method.
No changes have been made to the “actual cost” method.
Many who work from home will predominantly be better off if they spend the time maintaining the required records.
To discuss new fixed-rate changes and what they may mean to your employees, please get in touch with our team today.
