Key tax deduction extended for Aussies working from home

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on October 18, 2021
Key tax deduction extended for Aussies working from home

The Australian Taxation Office has extended a key tax shortcut that allows Aussies to claim 80 cents for every hour worked from home during the pandemic.

The shortcut has now been extended until June 2022, allowing Aussies to work out deductions for work from home expenses:

  • Between 1 March to 30 June 2020 in the 2019–20 income year.
  • For the 2020–21 and 2021–22 income years.

The temporary shortcut method from the ATO aims to simplify how Aussies can calculate their deductions for working from home expenses.

Instead of itemising individual work-related expenses, the shortcut method allows Aussies working from home to claim 80 cents for every hour worked from home. 

ABS data show that in June 2021, more people with jobs (37%) worked from home one or more times a week compared with before COVID-19 restrictions began in March 2020 (24%).

In Victoria specifically, 57% of people worked from home throughout lockdowns. 

However, despite the extension, Adrian Raftery - also known as 'Mr Taxman' - said 80 cents per hour is simply too low. 

"Although the 80 cents per hour shortcut method seems like an easy way to work out your home office expenses for your tax return, I estimate that a number of people will understate their claim by as much as $1,500 as they cannot claim internet, mobile phone, home phone and office equipment that they had to incur," Mr Raftery told Savings.com.au.

"Just like claiming your car expenses, I strongly recommend keeping all of your actual expenses incurred plus your hours worked and choose the best method when you or your tax agent prepares your tax return.

"Like with a number of other ATO rates, I am also surprised that the figure hasn’t been adjusted for CPI … it is not much but 80 cents a few years ago is probably 85 cents today."

Ultimately Mr Raftery said that extending the shortcut method was a "no brainer". 

"The pandemic has seen a definite shift in the way that businesses and employees work from home versus working in the office," he said.

"People will still be working from home in two to three months' time despite us hopefully being well and truly out of lockdown."

For more information on how to claim the deduction, visit the ATO website. 


Image by XPS via Unsplash

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Aaron joined Savings.com.au in 2021. He is a finance journalist with a keen interest in property, the share market, and improving financial literacy in young Australians.

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