6 March 2023
How will the upcoming ATO documentation requirements affect your working from home calculations?
Are you still enjoying the flexibility of working from home? If so, it is important to become aware of the recent change to the procedure for calculating working from home deductions.
With a change of working conditions over the last few years and individuals continuing to perform part of their working week from home under flexible working arrangements, the ATO has recently released and confirmed a number of changes and record keeping requirements affecting your work from home deductions.
From 1 July 2022 onwards, individuals can choose either the ‘new fixed rate method’ at 67 cents per hour, or the ‘actual cost’ method depending on what method works out best for you.
We would like to draw your attention the ATO’s new warning, that it will no longer accept estimates or a sample diary to calculate your fixed rate amount and from 1 March 2023 individuals will need to demonstrate the actual hours they worked from home (can be outside the normal working day) by either keeping a diary or daily timesheets recording your hours. You will also need a copy of at least one document for each running cost you have incurred during the year which is covered by the fixed rate method (energy costs, internet expenses, mobile and home phone expenses, stationery and computer consumables)
At Gillespie Advisory we will more than likely calculate both methods for you as we may find the actual method produces a better result as your expenses may be higher.
Using this method, we will claim any additional expenses you incur when you work from home (less any personal/private use). Using this method, we can claim the work-related portion of;
- The decline in value of depreciating assets (home office furniture (desk, chair) and furnishings, phones and computers, laptops or similar devices.)
- Electricity and gas (energy expenses) for heating, cooling and lighting.
- Home and mobile phone, data and internet expenses.
- Stationery and computer consumables, such as printer ink and paper.
- Cleaning your dedicated home office.
The ATO has several recommend methodologies and we recommend you reach out to your business advisor to assist you with this.
We would encourage all our clients currently enjoying their flexible working arrangements to start recording their work from home time through timesheets, rosters and/or diaries to assist us in your end of year tax preparation work and if you require any further information, please do not hesitate to contact us.
