Working from home deduction changes

The Australian Taxation Office (ATO) has changed the way that taxpayers claim deductions for costs incurred when working from home.

You have always been able to choose between two methods to claim working from home deductions. They are either the ‘actual cost’ or ‘fixed rate’ method. 

The ‘fixed rate’ method is changing from 80c an hour, which was introduced during COVID, down to 67c an hour.

The ‘actual cost’ method is changing from 52c an hour plus actual costs, to zero cents per hour plus actual costs.

The revised methods apply from 1 July 2022 and can be used when taxpayers are working out deductions for their 2022–23 income tax returns.

There have also been changes to record keeping. You’ll now need to keep a record of all the hours worked from home for the entire income year. The ATO won’t accept estimates, or a 4-week representative diary, these record keeping changes applying from 1 March 2023.

How you record these hours worked from home can be in any form provided they are kept as they occur. For example, timesheets, rosters, logs of time spent accessing employer or business systems, or a diary for the full year.

The ATO website has more detailed information. Simply use this link to view.

If you have any questions regarding these changes and how they apply to you please ask me paul@congdonfuzi.com.au