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  • Writer's pictureRuby Qin

A tougher gig to claim WFH Expenses - here's a breakdown of the revised rules

Are you one of the five million Aussies who've been claiming work from home deductions? Well, hold onto your ergonomic chairs because things just got a little stricter.

For this financial year (2023 FY) and beyond, there are only two methods for calculating your work from home claim:

  • the actual costs method (yawn)

  • the revised fixed rate method (ooh, shiny!).

The actual costs method requires meticulous record-keeping of every expense and depreciating asset purchased, including evidence of its work-related use. By way of example, to claim electricity expenses, the ATO suggests that you need to find out the cost per unit of power used, the average amount of units used per hour (power consumption per kilowatt hour for each appliance) and the number of hours the appliance was used for work-related purposes.

For this reason, the fixed rate method has been preferred (or in recent years the COVID shortcut method where you could simply claim 80 cents for each hour worked from home. Note, however, that the COVID-method is no longer available).

The revised fixed rate method has just upped the ante, increasing your claim from 52 cents to 67 cents per-hour. But wait, there's a catch. The new fixed rate now includes internet, phone, stationery, and computer consumables, so you can't claim those separately. On the bright side, cleaning expenses and depreciation on office furniture are now separate deductions, so you can claim those too.

Of course, with great rewards come great responsibility. The record-keeping requirements under the revised fixed rate method are now more onerous, so you'll need to keep a record of actual hours worked from home. The ATO will accept a record in any form, but recommends timesheets, rosters, logs of time spent accessing systems, time-tracking apps, or a diary. Say goodbye to estimates and four-week representative diaries! This new, strict record-keeping requirement starts on 1 March 2023. But for the period between 1 Jul 2022 to 28 February 2023, the ATO will accept a four-week representative diary.

Also, under the revised fixed rate method, you'll now need to provide at least one document for each type of expense to demonstrate that you actually incurred it. So hold onto your quarterly electricity bills, folks!

If all of this sounds a little overwhelming, never fear! Our team is here to help you navigate these stricter rules and make sure you're getting the most out of your work from home deductions.

Reach out to us with any questions or concerns. Happy home office-ing!

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