How to claim back the costs of working from home.
If you run your business from home or even partially from home ( after hours) listen up… The rules set by the ATO have changed today.
From 1 March 2023, the ATO now requires you to keep a diary / calendar record of all hours worked from home if you want to claim working from home (WFH) deductions. Prior to this date, you could just estimate WFH hours. Note that you can still estimate your hours for the period 1 July 2022- 28 Feb 2023.
To claim a deduction for WFH expenses you have 2 choices .
1. You can use the ATO’s fixed rate which, for the 2023 financial year end , is 67c per hour. ( During the pandemic until 30 June 2022 you could claim 80c p/h). This rate covers all WFH expenses – internet, phone , energy costs, stationery and office wear and tear.
2. The second option is to claim actual costs ie actual internet , mobile costs etc. This method requires a little more administration on your behalf as you need to keep all of your receipts. You can also only claim the percentage of the cost that relates to working ( which you can estimate). ie you can’t claim your entire energy bill. You also have to be able to show that YOU paid for the cost originally ( ie if mum paid it you can’t claim it. )
Here’s the thing – you can’t claim under both methods. If you choose the fixed rate, you can’t claim the actual cost as well ( makes sense) .
So what do you need to do ?
– Decide on which method you are going to use for FY 2023.
– Start keeping a diary of your WFH hours from today.
– If you are using the actual cost method, make sure you have a system for retaining your invoices.
That’s it. Easy. I love working from home and I’m sure you do too if you have the chance, so make the most of it and claim your deductions .
PS the ATO has no requirement for you to get out of your PJs by any specific time of the day 