Oct 18, 2021 Matthew Hung

COVID-19 Home Office hourly claim extended

The ATO has recently announced a further extension to the temporary shortcut method for claiming home office running costs, extending the method to the 30th of June 2022.

Initially announced in early April 2020, the shortcut method allows a taxpayer to claim a fixed rate of 80 cents per hour where he or she worked from home.

The fixed rate of 80 cents per hour covers all the following running expenses:

  • power, light and heating
  • cleaning costs
  • the decline in value and repair of home office items such as home office furniture and furnishings, phone, and computer or laptop devices
  • phone and internet expenses
  • stationery and computer consumables

It is important to note that if you choose to use this shortcut method, you will not be able claim a further deduction for any of the expenses listed above, as this is an “all-inclusive” rate.

It is also worth noting that each individual working from home will be entitled to claim 80 cents per hour, irrespective of how many people live in the same house.  This increases the appeal of this method where a number of people are working from the same location.  In addition, this method of claiming can be used where there is no separate or dedicated working space, which is a concession on the normal rules, and caters for many who have had to work from, for example, the kitchen table.

It will be necessary to keep a record of hours worked from home to back your claim.  The ATO has specified that appropriate records could include a timesheet, roster, diary or similar document that sets out the hours you worked.

You may, of course, continue to use one of the existing home office deduction methods.  The shortcut method is merely an alternative that has been offered as a concession in the current climate.

With a Productivity Commission paper stating that in less than two years, we have gone from less than 8 per cent of Australians working from home to 40%, the ATO is now looking to more agile and simpler methods to allow taxpayers to claim costs of working from home.

If you need more information, or help in determining which claim is best for you, please contact our office on 9878 1477.