Claiming Home Office Expenses for the 2019-2020 Financial Year

The first half of 2020 saw many employees, for the first time in their working lives, working from home for an extended period of time.  Given the uniqueness of this situation, the Government made an additional way for employees to calculate home office expenses.

This means that for the 2019-2020 financial year employees working from home actually have three ways of calculating home office expenses, as opposed to the normal two.

The new additional method of calculating home office expenses is appropriately recording the number of hours worked between 1 March 2020 and 30 June 2020 and claiming 80 cents per hour.

You can use this method where you are working from home so as to be able to fulfill your employment duties and secondly you have incurred additional running expenses as a result of working from home.

This method is intended to cover the additional costs in relation to phone expenses, internet expenses, the decline in value of equipment and furniture and the cost of electricity and gas for heating, cooling and lighting.

Should you choose this method then you can’t claim any other costs for working from home.  Note, this method does not require the employee to have a dedicated work area in the home.

How do you appropriately record the hours you worked?  The recording of hours worked through a diary, timesheet, roster or some other form of documentation that sets out hours of work is satisfactory for this purpose.

Note, as has already been stated, if you claim this method you can claim no other costs.  Therefore, if you were already working form home prior to 1 March 2020 this is not an appropriate method for calculating your costs of working from home.  In that case, you would need to use one of the two other methods for calculating working from home costs.

Note, the following types of expenses cannot be claimed when working from home :-

  • Coffee, tea milk and other general household items even if they were normally provided at work;
  • Costs incurred in relation to setting children up at home for home schooling; and
  • Costs that you are directly reimbursed for by your employer, paid for by your employer or the decline in value of items provided by an employer.

Please note that this is the simplest way to calculate deductible costs but this does not mean it will give an employee the best outcome for tax purposes.  If you are in doubt contact the friendly staff at Balanix Solutions for professional advice as to the other two methods and which one of the three methods would best suit your individual circumstances.