Taxpayers ‘in the dark’ about WFH changes

Taxpayers 'in the dark' about WFH changes

The Australian Taxation Office (ATO) has recently announced changes to the way taxpayers can claim deductions for costs incurred while working from home. Effective from 1 July 2022, the revised fixed rate method will be applicable for the 2022-23 income tax returns.

Recap

To claim working from home expenses, you must:

Be working from home to fulfil your employment duties, not just carrying out minimal tasks, such as occasionally checking emails or taking calls;
Incur additional running expenses as a result of working from home;
Have records that show you incur these expenses.

These are the current methods for calculating WFH expenses:

Method	FY 22	FY 23
Actual Cost Method	Yes No Changes	Yes No Changes
Fixed Rate Method	Yes 52 cents per work hour	Yes 67 cents per work hour
Shortcut Method	Yes 80 cents per work hour	N/A

About the Revised Fixed Rate Method

An amount per work hour for additional running expenses;
Separate amount for expenses not covered by the revised fixed rate, such as the decline in value of depreciating assets;
You no longer need a dedicated home office.

Record-Keeping Requirements

Method	Requirements
Actual Cost Method	A record of every expense you claim: Receipt, bills, invoices etc. Evidence of your personal and work-related use of the items or services. Can use records over the entire year OR a 4-week period that represents your work use.
Fixed Rate Method	1 July 2022 to 28 February 2023 The ATO will accept a representative record of the total number of hours worked from home i.e. 4-week diary. From 1 March 2023 A record of all hours worked from home is required for the entire year (i.e. a timesheet, roster, diary or similar document). Additionally, you will also need: Evidence you paid for the expenses (i.e. if you use your phone and electricity when you work from home, keep one bill for each of these expenses) Records for items you claim as a separate deduction.

The ATO has provided more resources to help you understand WFH deductions:

Source: Tailored Tax

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