Working From Home Deductions
Methods available for use to calculate working from home expenses.
The ATO have now identified that there are two methods that can be used to calculate your working from home expenses.
Fixed Rate Method
The Fixed Rate method is a fixed rate of 67 cents per hour that includes internet and phone expenses, electricity, and gas (all running expenses). With this method you can also claim equipment purchased and depreciation (e.g., office chair, laptop) in addition to this 67 cents per hour.
Actual Method
The Actual method is the other method that can be used to calculate working from home expenses. This method involves calculating the exact costs of each running expense used for your home office during working hours. See below of a rundown of how to calculate actual energy costs for your home office.
The formula is: (cost per kilowatt ) X (average kilowatt used per hour per item*) X (total annual hours used for working from home)
Cost per unit of power can be found on your energy bill.
Make sure to keep a record of your hours worked from home and let your tax agent know if you took time off during the year so that they do not include these hours.
*E.g. Laptop, air conditioner, light bulb etc. The kilowatts used per item are specific to your own devices. You will need to check the energy rating for each item you own to calculate the average kilowatts used per hour.
See below link for ATO example to calculate electricity, bottom of page
Record-keeping working from home hours
The ATO now require you keep records of your hours worked from home for the full financial year. This may be a roster, diary or other logbook to ensure you can verify your hours worked from home. You are supposed to keep a record of your hours using each item you want to claim, e.g. hours using your air conditioner/heater, hours with lights on etc.