Employees working from home

 The other kind of Housework

 If you’re an employee who regularly works from home, you may be able to claim a deduction for expenses relating to that work.

 Running expenses

 Employees who work from home can claim the work-related proportion of their running expenses. These expenses are the cost of using equipment and utilities at your home for work and include: 

  • lighting 
  • heating and cooling 
  • cleaning 
  • the decline in value of equipment, furniture and furnishings in the area you use for work 
  • the cost of repairs to this equipment, furniture and furnishings, and 
  • other running expenses including computer consumables (such as printer paper, ink) and stationery.

 Occupancy expenses

 As an employee, generally you can’t claim a deduction for occupancy expenses, which include rent, mortgage interest, property insurance, land taxes and rates. For more information, see ato.gov.au/occupancyexpenses.

 Phone and internet expenses

If you use your phone or internet for work, you can claim a deduction for the work-related percentage of your expenses if you paid for these costs and have records to support your claims.

You need to keep records for a four-week representative period in each income year to claim a deduction of more than $50. These records include phone bills (paper or electronic) from which you can identify work-related calls. Diary entries and evidence that your employer expects you to work at home or make some work-related calls will also help you demonstrate that you are entitled to a deduction.


 Calculating running expenses

 There are two ways to calculate your running expenses: 

GreenTickyou can claim a fixed rate of 52 cents per hour, or

GreenTickyou can calculate your actual expenses.

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Fixed rate

You can use a fixed rate of 52 cents per hour for each hour that you work from home. This method incorporates all the items you are able to claim, including the decline in value of office furniture and furnishings (such as desk and chair).

You can keep a diary that documents your pattern of office use for a minimum of four weeks in a financial year. The diary should outline the actual hours you spent working at home. You can then apply this amount of use across the remainder of the year to determine your full claim.

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 Actual expenses

To calculate actual expenses if you have a dedicated work area, you: 

GreenTickrecord the total expenses for lighting, cleaning, heating, cooling and electricity for any depreciating assets used for your home for the year 

GreenTickwork out the floor area of the part of your home that you use for work as a percentage of the total floor area 

GreenTickwork out the percentage of the year you used that part of your home exclusively for work – eg if you used it for work for six months during the year, the percentage would be 50% (note: in working this out you must also take into account the use of that area by other members of your household if applicable). Apply this percentage to your calculation above to determine the amount you can claim.

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 If you did not have a dedicated work area, the additional expense for lighting, heating, cooling and electricity should be calculated by determining the actual cost of running each unit you used per hour and multiplying that by the hours you spent working at home. Generally, the amount of additional expense will be small. This will be particularly so where other people are using the area at the same time you are working there. In those circumstances there will be no additional cost for lighting, heating or cooling (see the scenario below).

You can calculate your deductions for decline in value by working out the amount of depreciation for each item for the year, and claiming the proportion of the amount which reflects your work-related use. The ATO has a depreciation tool to help you work this out, at ato.gov.au/depreciationtool


Calculating phone and internet expenses

There are two ways to calculate your phone and internet expenses: 

GreenTickyou can claim up to $50 with limited documentation, or

GreenTickyou can calculate your actual expenses.

Claiming up to $50

If your work use is incidental and you are not claiming a deduction of more than $50 in total, you may make a claim based on the following, without having to analyse your bills: 

GreenTick$0.25 for work calls made from your landline 

GreenTick$0.75 for work calls made from your mobile 

GreenTick$0.10 for text messages sent from your mobile.

Actual expenses

If you have a phone or internet plan where you receive an itemised bill, you need to determine your percentage of work use over a four-week representative period which can then be applied to the full year.

You need to work out the percentage using a reasonable basis. This could include: 

GreenTickthe number of work calls made as a percentage of total calls 

GreenTickthe amount of time spent on work calls as a percentage of your total calls 

GreenTickthe amount of data downloaded for work purposes as a percentage of your total downloads.

If you have a bundled or non-itemised plan, you need to identify your work use for each service over a four-week representative period during the income year, which can then be applied to the full year.

For more information, see ato.gov.au/phoneandinternet


Common scenarios

Julia – A dedicated room for work

Julia is a lawyer who works as an employee for a large city firm. Julia’s employer has agreed that she can work from home two days per week. She has a home office that she works in on the days she does not travel to the city. Julia and members of her family use the home office for private purposes, including personal use of the computer and to store household items. 

GreenTickJulia can claim running costs, but only the portion of the expenses that relate to her work-related use of the home office. In working out her work-related use of the home office and the computer, Julia must take into account not only her own private use but also her family’s use of the home office and the computer.

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James – no set work area

James is a high school teacher. From time to time, James works in the lounge room at home – for example, to mark tests and prepare end of term reports. He does not have a room set aside exclusively for work. 

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James can only claim running costs associated with the work he does at home – such as the work-related proportion of the decline in value of the laptop he uses to prepare the reports and the additional cost of lighting, heating and cooling his lounge room. He is also entitled to claim the cost of electricity to power his laptop for the hours he spends working at home. 

RedCrossIf James’ family was in the lounge room watching television at the same time that he was in there marking tests and preparing end of term reports, he could only claim the cost of electricity required to power his laptop for the time he spent working as that is the only additional cost he incurs as a result of working from home.

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Natalie – chooses to work from home

Natalie is a web developer for a large company and usually works from their office in her city. While Natalie is not required to work from home, her employer supports it. Natalie is not provided with the work equipment to use at home, so she uses her own laptop, internet connection, mobile phone and thumb drive. She is not reimbursed by her employer for these costs. 

GreenTickNatalie is entitled to claim running costs including the work-related proportion of the decline in value on her laptop, her office desk and chair, and a percentage of lighting, heating and cooling that reflects her work-related use of the office, as well as the cost of using her own internet connection and mobile phone for work. Natalie needs to apportion these expenses to take her private use into account.


Records you must keep

You must keep records of your expenses, such as: 

GreenTickreceipts or other written evidence, including for depreciating assets you have purchased 

GreenTickdiary entries to record your small expenses ($10 or less) totalling no more than $200, or expenses you cannot get any kind of evidence for 

GreenTickitemised phone accounts from which you can identify work-related calls, or other records, such as diary entries, if you do not get an itemised bill.


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