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Australian Taxation Office (ATO) Revises Working-From-Home Deductions for 2022-23

The Australian Taxation Office (ATO) has revised its working-from-home (WFH) deductions for the 2022-23 financial year, which allows taxpayers to claim a fixed rate of 67 cents for WFH expenses. Previously, the fixed-rate method for WFH deductions was 52 cents per hour, but the revised method includes phone and internet expenses, electricity and gas usage, and stationery. However, taxpayers will have to claim a decline in value of work-related equipment such as office furniture separately. The revised fixed-rate method will apply from 1 July 2022 and can be used when taxpayers are working out deductions for their 2022-23 income tax returns.

Assistant Commissioner Tim Loh said that the changes provide benefits for those using the revised fixed rate in 2022-23, as items that are difficult to calculate, like phone, internet, and electricity expenses, are included in the revised rate. However, taxpayers must make sure they are eligible for WFH allowances, which means they must be working from home to fulfill employment duties, not just carrying out minimal tasks. Additionally, they must incur additional expenses as a result of working from home.

The ATO reassures taxpayers who haven’t kept records so far this income year that transitional arrangements are in place for 2022-23. From 1 July 2022 to 28 February 2023, the ATO will accept a record representing the total number of hours worked from home. From 1 March 2023 onwards, taxpayers will need to record the total number of hours they work from home. It is important for taxpayers to consult with their financial and legal advisors to ensure they are following the ATO’s guidelines and requirements.

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