ATO updates working from home expense guidance for 2022-23

These changes come as the 80 cents per hour shortcut or fixed-rate method ended with the 2021-22 financial year. 

The previous method allowed taxpayers to calculate how many days and hours spent working from home during the previous two financial years, multiplying this amount by 80 cents or 0.80. 

Under the ATO’s Practical Compliance Guideline for the 2022-23 financial year, the shortcut and fixed-rate method has been reduced to a 67 cents per hour claim. 

Despite a 13 cent per hour reduction, the 67 cents per hour claim continues to include energy, internet and mobile expenses as well as costs incurred for stationery and computer consumables.

Further, additional claims are eligible to be made for work equipment and other expenses.

Mark Chapman, Director of Tax Communications at H&R Block, noted the decision comes as bad news for taxpayers.

“The 67 cent fixed rate will disadvantage taxpayers compared to either of the two old methods,” Mr Chapman said. 

“For a typical taxpayer who worked at home for six months, the old 80 cent rate would produce a deduction of approximately $768. Using the 52 cents rate, this increased to approximately $1,309 because separate claims could be made for mobile phone, internet and stationery.

“Using the new 67 cents rate, the on-going deduction instead is approximately $643.20 - plus one off deductions for office furniture costing less than $300.”

See Also: The potential $1,110 penalty for not lodging your return by 31 October

Aussies required to provide more documentation for new rate

Alongside a reduction to the shortcut and fixed-rate method, Mr Chapman notes the compliance requirements for the new 67 cent rate are more stringent than the now extinct 80 cent. 

“As well as a record of time spent working from home, the taxpayer also needs to keep evidence for each of the additional running expenses that they incurred,” he said. 

“For example, for energy bills it is necessary to keep one monthly or quarterly bill. 

“This is new and imposes a significant compliance burden – particularly for people who previously claimed the 80 cents/hour method, who were only required to keep a record of the number of hours worked."

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