What is the best way to claim Work From Home expenses for the 2024FY?

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Two methods to claim WFH expenses in 2024FY.

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‍Fixed Rate Method

A simplified approach to calculate the costs incurred while working from home altogether by claiming a fixed rate of 67 cents* per hour. The following expenses are included in the fixed rate method.

• Home and mobile internet or data expenses
• Mobile and home phone usage expenses
• Electricity and gas (energy expenses) for heating, cooling and lighting
• Stationery and computer consumables, such as printer ink and paper

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Note that water bills are not part of regular WFH expenses. You can claim them separately as an occupancy expense deduction (But beware of CGT consequences if you own your own home)

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*Referring to 2023FY rate. 2024FY fixed rate has not been officially announced as of now.

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Actual Cost Method

A method to report the actual expenses you incur as a result of working from home. You should keep records of the costs covered within the fixed rate method, as well as additional expenses outlined below.

• Depreciation expenses: ex,  home office furniture, phones and computers
• Cleaning expenses for your home office

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If the running expenses are for both personal and work-related purposes, you need to apportion your deduction on a reasonable percentage of your work-related use. If the item costs $300 or less, you can claim an immediate deduction. 

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Which method is the best for claiming WFH expenses?

Generally, using the actual cost method can potentially raise your deduction amount when you have numerous expenses, while the fixed rate method is advantageous for those seeking simplicity and convenience.

Note that both methods require a log of your working hours; in addition to this, you must maintain records of all your WFH expenses for the actual cost method.

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Let’s see who benefits from which method!!

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Suppose you incurred the following WFH expenses for the 2023 FY. The calculation is made by apportioning 15% of the home area and 60% of your mobile expenses for work-related use. You bought a new phone (Outright) this year, and it will depreciate over 3 years.

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Your total amount available to claim deduction is $985 with the actual cost method.

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The choice of method that you will benefit from can be different based on the number of hours worked from home. In the fixed rate method, simply multiply the hours by 0.67 (67 cents).

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800 hours $536

1000 hours $670

1500 hours $1005

1800 hours $1340

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Compared with the deduction amount of  $985  from the actual cost method, applying the fixed rate method benefits an individual who worked over 1500 hours.

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