Tax Deduction for Home Office Expenses?
Tax Return - Tax Deduction for Home Office Expenses?

Tax Deduction for Home Office Expenses?

Published on July 1, 2021
Sam Inayat - Bookkeeping, Tax return and BAS expert

Top Accountants

The way we work is changing. Increasingly, we demand flexibility in the way we work or run our business and it is now common for people to spend at least some of their time working from home; sometimes at weekends, sometimes at night and sometimes during the day to work around commitments such as child care.

In this article we will cover following home office expenses / work from home tax deduction questions:

  1. How do I calculate & claim home office expenses as a tax deduction?
  2. List of home office expenses you can claim as a tax deduction?

1. How do I calculate & claim home office expenses as a tax deduction?

ATO has provided two different ways to claim home office expenses as a tax deduction as following:

  1. Diary and actual running cost
  2. ATO provided rate per hour

Tax payer is suggested to select only one way depending upon whichever provides greater refund.

1.1 Diary and actual running cost

In this method, you will need to keep a diary to work out how much of your running expenses relate to doing work in your home office. The diary needs to detail the time you spend in the home office compared with other users of the home office. Keep diary records for a representative four-week period. Once four weeks diary is complete, use it as an average to calculate remaining months home office costs deduction.

1.2 ATO provided rate per hour