Expenses you can claim as a tax deduction

The COVID-19 outbreak has seen many of us working from home to comply with social-distancing measures. With many of us working from home, we have written up a quick guide on expenses which you can claim as a tax deduction. A brief outline is presented below:


Home office running costs:

  • With these costs you can claim either a “cents per hour” deduction (relatively simple) or “actual expenses” (relatively complex).
  • Cents per hour claim:
    • There is a simple 52 cents per hour which covers running costs of a home office.
    • This is designed to cover heating, cooling, lighting, cleaning, and furniture. This means that you can’t claim for the purchase of a desk/chair/similar.
    • To claim, you would have to keep records of your hours spent. This can be a record of actual hours or alternatively a 4-week diary showing a usual pattern.
    • The representative diary would give you a good indication of hours per week worked from home, so that when you prepare your return you could claim, for example, 40 hours a week for 16 weeks during covid-19 and 8 hours a week for 32 weeks normally.
  • Actual expenses claim
    • This required you to keep records of:
      • actual expenses for heating, cooling, lighting, cleaning, and furniture.
      • floor area of your work area as a percentage of your total house.
      • apportionment between private and business use.
    • This claim is relatively complex and under most circumstances does not lead to a significantly higher deduction than the cents per hour claim.
  • Important things to note:
    • Under the cents per hour claim you can’t claim a deduction for furniture purchases (but you can claim for other office equipment, eg a computer equipment, printers)
    • Under some limited circumstances you can claim for occupancy expenses (ie mortgage, insurance, rates) but this will affect your main residence CGT exemption


Other home office costs:

  • These are costs other than heating, cooling, lighting, cleaning, and furniture.
  • They can include:
    • Telephone
    • Internet
    • Stationery
    • Computer-related consumables, ie printer ink
    • Decline in value of office equipment, eg Computer/Printers/Scanners
  • If they are used for both business and private purposes, then you’ll have to apportion your claim between the two, ie if you use your mobile phone for work around 35% of the time, then you can claim 35% of the bill.
  • You unfortunately cannot claim a deduction for snacks!

Please get in touch with us on 02 6115 9000 if you have any other questions.