ATO Home Office Expenses – as a result of Covid 19

If you’re an employee and temporarily work from home due to recent events, such as COVID-19 (coronavirus), bush fire and drought, you may be able to claim a deduction for expenses you incur relating to that work.

You may be able to claim a deduction for additional running expenses you incur such as heating, cooling and lighting. You can also claim the work-related proportion of the decline in value of office equipment.

In most cases, if you work from home as an employee and claim working from home expenses, there are no capital gains tax (CGT) implications for your home.

You must keep records to show these expenses and how you have calculated your claim.

You can claim a deduction of 80 cents for each hour you work from home due to COVID-19 as long as you are:

• working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls
• incurring additional deductible running expenses as a result of working from home.

You do not have to have a separate or dedicated area of your home set aside for working, such as a private study.

The shortcut method rate covers all deductible running expenses, including:

• electricity for lighting, cooling or heating and running electronic items used for work (for example your computer), and gas heating expenses
• the decline in value and repair of capital items, such as home office furniture and furnishings
• cleaning expenses
• your phone costs, including the decline in value of the handset
• your internet costs
• computer consumables, such as printer ink
• stationery
• the decline in value of a computer, laptop or similar device.

You do not have to incur all of these expenses, but you must have incurred additional expenses in some of those categories as a result of working from home due to COVID-19.

If you use the shortcut method to claim a deduction for your additional running expenses, you cannot claim a further deduction for any of the expenses listed above.

You must keep a record of the number of hours you have worked from home as a result of COVID-19. Examples are timesheets, diary notes or rosters.

If you use the shortcut method to claim a deduction and you lodge your 2019–20 tax return through myGov or a tax agent, you must include the note ‘COVID-hourly rate’ in your tax return.