Small businesses and taxpayers who run their office from their home will now be able to claim a larger rate for their running expenses.
The rate has been increased from 45c per hour to 52c per hour, and the change is effective as of 1 July 2018.
The rate includes the following home office running costs:
- cleaning costs
- heating and cooling
- lighting
- decline in value of furniture and furnishings.
In order to make a claim for home office running expenses, the worker must keep a record to show how many hours they work from home.
Alternatively, instead of using the fixed hourly rate option, taxpayers can calculate their actual expenses individually. In this case, a record must be kept of all bills/charges. The taxpayer must also proportion what percentage of the charges are related with the home office, which is done by calculating the floor area used for work as a percentage of the total home floor area.
Other expenses that are not included in running costs are:
- internet and phone costs
- decline in value of a computer
- decline in value of office equipment.
These expenses can be claimed in some circumstances, but this is dependent on the reason you work at home. The below table explains further.
| Expenses | Home is principal workplace with dedicated work area | Home not principal workplace but has dedicated work area | You work at home but no dedicated work area |
| Running expenses | Yes | Yes | No |
| Work-related phone & internet expenses | Yes | Yes | Yes |
| Decline in value of a computer (work related portion) | Yes | Yes | Yes |
| Decline in value of office equipment | Yes | Yes | Yes |
| Occupancy expenses | Yes | No | No |
Table: ATO
If you are confused or concerned, you may contact a tax champion at (03) 8393 1000 who will be more than happy to discuss what you are eligible to claim.
