Thinking | 2 April 2020

What deductions can you claim if you are self-isolating and working from home during COVID-19

By Rachel Law

If you have recently been directed to work from home as part of the response to COVID-19, you may be wondering what work expenses you are entitled to claim as a deduction.

What can I claim?

Equipment costs, running costs and occupancy costs are the main expenses you may be able to claim as a deduction. In each case, you will only be able to claim the amount of the cost attributable to your work usage. This means you must consider costs attributable to other members of your household, or for personal use and apportion those accordingly.

Equipment costs

Additional equipment purchased to work from home such as keyboards, monitors, printers and stationery may be deductible if your employer has not reimbursed you for them. However, if an item of equipment costs over $300, it cannot be immediately deducted and must be depreciated over time.

Running costs

Running costs relate to household expenses such as electricity, cleaning, heating/cooling, depreciation of furniture and repair costs (but not computer consumables or stationery which are dealt with above).

There are two available methods to calculating your running costs which broadly involve:

  • using the actual running expenses recorded in a diary over a four week period; or
  • claiming an amount calculated as 52 cents per hour of work at home.
Occupancy costs

Occupancy costs include rent, mortgage interest and home insurance premiums. The amount deductible is generally based upon the area within the home dedicated to working from home.  Depending on the circumstances, the main residence capital gains tax (CGT) concession may still apply to part of the property. Professional advice should be sought if making such a claim.

What evidence do I need?

The best way to evidence your expense is to keep your receipts, although evidence of bank transfers is sometimes acceptable when the recipient and purpose are clear.

For expenses that relate to both personal and work-related use, it is important to keep a logbook that shows the usage of the item over a four-week period. This will be taken to be representative of the usage for the year.

What next?

If you have any further questions please contact Rachel Law.

Contact

Rachel Law

Taxation lawyer Rachel Law, specialises in direct taxes and tax disputes. She is experienced in domestic and international laws.

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