ATO’s new short cut method for claiming home office running costs

What is the measure?

As a result of the need to work from home due to the COVID -19 outbreak, the Australian Taxation Office (ATO) has announced a temporary, simplified method to make it easier to claim deductions for additional running expenses such as additional heating, cooling and lighting costs.

Who is eligible?

The ATO will allow all individuals to claim a deduction for all home office running costs incurred between 1 March 2020 and 30 June 2020. This will be based on 80 cents for each hour an individual carries out genuine work from home. This deduction is designed to cover all running costs, and includes:

  • Electricity

  • Cleaning costs for designated areas
  • Phone, internet and computer expenses
  • Depreciation of home office furniture
  • Depreciation of home office equipment

How does it work?

Under the 80 cents rule, separate claims cannot be made for the above. This may result in a lower claim, when compared to the current arrangement for certain expenses which is 52 cents per hour but allows for additional entitlements.

In addition:

  • There is no requirement to have a designated work space such as study
  • Multiple people living in the same house can claim
  • An individual only needs to keep a record of the hours they have worked and receipts during the above period (1 March 2020 to 30 June 2020)

When can I claim?

Claims are able to be made in your tax return for the 2020 tax year.

Top Tip

The 80 cents per hour method is easy but you may be eligible for a greater tax deduction using the previous 52 cents per hour method. Call your CAAA Advisor to see what you may be eligible for.