Effective from 1st July 2022
The Working from Home Fixed Rate deduction will increase from 52 cents per hour to 67 cents per hour and will apply from this tax year – July 1 2022 to June 30 2023.
What’s changed?
There still exists the 2 methods to calculate Working from home deductions
• Revised fix rate method
• Actual cost method
The actual cost method has stayed the same but the revised fixed rate has a couple of significant changes.
What is included in the Revised Fixed Rate Method?
- There is no longer a requirement to have a dedicated home office space – you can work from your kitchen bench if that is the only space available.
- Includes as before – electricity and gas
- No longer includes depreciation on office furniture and furnishings
- Additionally includes Phone – mobile & landline, internet usage, computer consumables and stationery.
Additional deductions not included in the fixed rate?
- Decline in value on work related depreciating assets can be claimed separately, including work related office furniture and furnishings and technology.
- Office cleaning can be claimed separately.
**Deductions are limited to work related percentage.
Who can claim?
The revised fixed rate method can be used by businesses which operate from home as well as individuals.
Record keeping requirements with the new fixed rate?
• From 1st July 2022 to 28th February 2023 – required to have a record which is representative of the work from home hours eg 2 days per week.
• From 1st March 2023 to 30th June 2023 – required to keep a record of the total number of hours worked from home, e.g. a timesheet, roster or diary, as well as at least 1 payment evidence for each of the expenses incurred covered by the fixed rate, e.g. electricity bill and phone/internet bill, stationery and computer consumables.
Please note – no additional separate deductions can be claimed for the above expense categories.
For the Statistic Lovers
The 2018/2019 Income year had 2millions Aussies claiming working from home expenses and in 2021/2022 Income year this increased to 5million tax payers . The amount claimed increased by 33% from 2019/2020 at $43.11 billion to $4.14 billion in 2021/22 tax year. An average claim has gone from $650 to $830.
Disclaimer: Please note that the information provided in this communication is not intended to be, and should not be construed as, legal or tax advice. The content is for informational purposes only, and is not a substitute for professional advice from a licensed tax advisor.
Each person’s tax situation is unique, and it is important to consult with a qualified tax professional before making any decisions regarding your tax liabilities. The tax laws and regulations are subject to change, and the information provided may not be applicable to your specific situation.
Greenhalgh Pickard’s Accounting Team
