The ATO has introduced a revised fixed rate method for claiming work-related expenses when working from home.

From 1/07/2022, under the revised fixed rate method, individuals who work from home as part of their employment can claim a deduction of 67 cents for every hour worked from home, which covers expenses such as electricity, gas, mobile, stationery and internet usage. This means that the maximum deduction that can be claimed using this method is $1,286.40 per year, based on working from home for 40 hours per week for 48 weeks per year.

The revised fixed rate method is intended to simplify the process of claiming work-related expenses while working from home. It is an alternative to the actual cost method, which requires individuals to keep a detailed record of all their home office expenses and calculate the percentage of work-related use. However, taxpayers are required to keep a record of all the hours worked from home for the entire income year. Records can be in the form of timesheets, rosters or a diary from 1 July 2022 to 28 February 2023. From 1 March 2023, taxpayers are required to record the total number of hours they worked from home.

It is important to note that deductions for the decline in value of depreciating assets when working from home such as office equipment are calculated separately. The shortcut method of 80 cents per hour and the fixed rate method of 52 cents per hour will also not be available from 1/07/2022. The below table summaries which method can be used in which years.

Method	Financial year
Actual cost	Any year
Fixed rate method- 52 cents per hour	2019 2020 2021 2022
Shortcut method- 80 cents per hour	1 March 2020- 30 June 2020 2021 2022
Revised fixed rate method- 67 cents per hour	2023

If you work from home and require assistance on this matter, please contact our office at 03 9973 5905.