There are three different ways you can calculate your working-from-home deduction. Whether you can claim a deduction, the amount you can claim and which records you need to keep will depend on the method you choose.
1. Shortcut method - You can claim an all-inclusive 80 cents per work hour. This method is temporary and can only be used to calculate your working-from-home deduction between:
1 March to 30 June 2020 in your 2019–20 tax return, and
1 July to 31 December 2020 in your 2020–21 tax return.
If you use this method, you can't claim any other expenses for working from home for that period.
2. Fixed rate method - If you have a dedicated work area (like an office), you can claim a fixed rate of 52 cents per work hour. This rate covers the cost of:
the decline in value of office furniture.
You will need to separately calculate your work-related use of:
computer consumables and stationery (such as ink)
decline in value of equipment (such as phones, computers and laptops).
3. Actual costs method - You can claim the actual work-related portion of your running expenses, which you need to calculate on a reasonable basis.
What records do I need to keep proving my claims?
If you use the shortcut method, you need to keep a record of the hours you worked at home. This could be a timesheet, roster, diary or similar document that shows the hours you worked.
If you use the other methods, you must also keep a record of the number of hours you worked from home along with records of your expenses. For more information on what those records are see home office expenses.
Can I claim a deduction if I bought new office equipment like a laptop or desk?
If you use the other methods, it depends on how much the item costed. If it was under $300, you can claim an immediate deduction. If it cost more than $300, you can’t claim an immediate deduction - you must calculate the depreciation.
Can the shortcut method be used by multiple people working in the same house?
Yes, multiple people living in the same house can individually claim the 80 cents per work hour deduction.
I am now working from home due to COVID-19. If I have to travel into my workplace to complete some work can I claim travel costs?
Generally, people cannot claim a deduction for the cost of travelling from home to work. Your home does not become your base of employment/operations simply because you are working from home due to COVID-19. If you are working from home due to COVID-19 but sometimes need to go to your office, the travel between your home and your workplace cannot be claimed as it is considered a private expense.
I made changes to my house to create a home office during COVID-19. Are these costs deductible?
No, as an employee, you can’t claim a deduction if you extend your home to build a new home office or you renovate your home to include a home office so that you can work from home.
If I have been directed to temporarily work from home, can I claim occupancy costs like mortgage interest or rent?
No. If you are temporarily working from home due to COVID-19, you won’t be able to claim a deduction for occupancy expenses such as rent, mortgage interest, property insurance and land taxes. The costs incurred in maintaining your home are generally domestic in nature.
It’s important to note that as an employee temporarily working from home during COVID-19 your home does not become your sole base of operations simply because you can’t currently use or access the usual work location that your employer provides.