Revised WFH Expenses 2023FY

How to claim work from home expenses in the 2023FY

Starting from 1 July 2023 the Australian taxation office will only accept 2 methods of claiming work from home expenses:

1)    Revised fixed rate method at 67c per hour

2)    Actual cost method.

The previous methods available for the 2022FY – The Shortcut method at 80c per hour and fixed rate method at 52c per hour are no longer available for the 2023 financial year.

‍

Revised fixed rate method (67c per hour)

The revised fixed rate method allows taxpayers to claim a deduction of 67c per hour worked from home. This 67c per hour will cover:

• Energy expenses (electricity and gas) for lighting, heating, cooling and running of computer
• Internet expenses
• Mobile/telephone expenses
• Stationery and computer consumables

You will also be able to claim an additional deduction for the depreciation of office equipment such as computers / desks / chairs etc.

It is not required that you have a separate home office to claim the 67c method according to PCG 2022/D4 released by the ATO.

Substantiation for these expenses would include 1 energy bill from the period, 1 phone bill from the period, 1 Internet bill from the period, individual receipts for computer consumables and a tax invoice for equipment purchases.

Actual hours worked from home must be recorded on a timesheet or excel spreadsheet or similar, an estimate does not suffice.

Actual Cost Method

The actual cost method is an alternative method for calculating work from home expenses which although is more thorough is not necessarily more beneficial to the tax payer.

The actual and revised fixed rate method should be compared and the most beneficial of the two used.

The actual cost method allows for the following deductions in the following ways:

• Depreciation on office equipment: This deduction is worked out using the cost of the asset, estimated life of asset and work-related use %
• Cleaning expenses – Worked out based on square footage of home office compared to rest of house
• Heating and cooling – Worked out by finding the average cost of unit of energy used and applying this to the amount of time worked from home.
• Telephone and Internet – Use an itemised bill to work out the percentage of work related data and phone calls over a 4 week period and apply this to the whole year.
• Stationery and consumables – Keep individual receipts for all stationery purchases.

Need help with claiming your work from home expenses?

 CTK Accounting is an accounting firm based in Wollongong, servicing customers all over Australia.

Reach out to us via our contact page for Individual or business tax needs.

‍