Being at home more, setting up an office space and using your internet and phone for work as an employee obviously costs money, and there are options for how to calculate legitimate tax deductions for this. Like a lot of other things, these options changed a few times through and since 2020; here we outline the methods of calculation and the receipts and evidence you need to keep for each.
Through COVID, many of us moved to working from home and many continue to do so at least part of the time. The Chromatic team love the flexibility and the lack of commute, but we understand some people and some roles work better in person. The information below relates primarily to working for an employer from home - for the self-employed, the principles are similar but it's worth seeking professional advice tailored to your business.
Calculation Methods
For some time there has been an hourly rate allowed by the ATO to estimate certain expenses to do with working from home, but sometimes the details are fuzzy when taxes are prepared! Once you are using a per-hour method, you can't claim the any of the covered categories of expense separately, so the trick is knowing what expenses would create a double-up and potential ATO hassle.
To keep us on our toes inclusions in each hourly rate have varied over the last few years:
| COST OF: | Years ended 30 June 2023, 2024, 2025 | 1 March - 30 June 2020, 2020-2021 & 2021-2022 | up to 28 February 2020 |
 | Home Internet & Data | Covered in 67c per hour rate OR actual cost if sufficient records kept | Actual Costs OR shortcut 80c method | Actual Costs |
 | Mobile and / or home phone | Covered in 67c per hour rate OR actual cost if sufficient records kept | Actual Costs OR shortcut 80c method | Actual Costs |
 | Stationery & consumables | Covered in 67c per hour rate OR actual cost if sufficient records kept | Actual Costs OR shortcut 80c method | Actual Costs |
 | Electricity / Gas for heating, cooling & lighting | Covered in 67c per hour rate OR actual cost* if sufficient records kept | Covered in 52c per hour rate for dedicated home office OR shortcut 80c method | Covered in 52c per hour rate for dedicated home office |
 | Cleaning | Actual costs for dedicated home office | Covered in 52c per hour rate for dedicated home office OR shortcut 80c method | Covered in 52c per hour rate for dedicated home office |
 | Depreciation on office furniture | Actual cost depreciation | Covered in 52c per hour rate for dedicated home office OR shortcut 80c method | Covered in 52c per hour rate for dedicated home office |
 | Depreciation on office equipment | Actual cost depreciation | Actual cost depreciation OR shortcut 80c method | Actual cost depreciation |
 | Occupancy Expenses (home loan interest, rent, insurance, rates) ** | IF conditions met, actual costs portioned by floor area | IF conditions met, actual costs portioned by floor area | IF conditions met, actual costs portioned by floor area |
* Utility expense deductions are no longer restricted to where you have a dedicated office area, but remember they are deductible only so far as the costs increased because you were working from home. If you work from home with other people in the same room who are not working, you are not considered to incur any additional costs to light or heat/cool the room. The actual method for energy use depends on the appliances used, how long each one is used, and their power needs compared to the cost of your energy bills.
** ONLY IF your employer doesn't provide another location to work from, and you have a dedicated area that is not readily capable of being used for any non-work purpose. Claiming these costs for a home you own may have tax impact in the future when you sell the property.
Records to Keep
The substantiation requirements have changed as well:
Actual Cost method
Records needed: receipts/proof of payment (for everything!!) and evidence of work-related and personal use of those expenses - over a 4-week typical period or records for the whole year
67 cent Fixed Rate "revised method"
Records needed: Evidence of all hours worked from home,
one evidence of payment for each expense type covered (e.g. one stationery receipt, one electricity bill)
80 cent Shortcut Method
Records needed: evidence of all hours worked from home, e.g. roster, timesheet, diary etc
52 cent Fixed Rate
Records needed: actual number of hours worked from home OR a continuous 4-week diary of a typical pattern of working from home;
receipts;
phone accounts for 4 continuous weeks identifying personal vs private calls to work out work-related percentage;
diary or similar to document work internet use, private internet use and use by others in the household and the usage of your furniture and equipment for work
If this is overwhelming, we don't blame you!! Please get in touch and we can have a chat to make sure you're on the right track.
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