As businesses around the nation adapt to the situation around COVID-19, many employees are now working from home.
The ATO has released information for employees regarding claiming some expenses incurred when working from home.
It’s important that as an employer, you are aware of this information too, and can ensure that your staff members know what they can and cannot claim.
If you have employees working from home, they may be claiming some of these expenses that are going to be reimbursed by you.
But whether they make the claim, or you reimburse them, to claim a deduction for working from home, the following must apply:
– They must have spent the money.
– The expense must be directly related to earning an income.
– They must have a record to prove it.
This also means they cannot claim a deduction for items provided by you, or if you have reimbursed them for the expense.
If they are not reimbursed by you, as the employer, but instead receive an allowance from you to cover their expenses when working from home, the employee:
- must include this allowance as income in their tax return
- can claim a deduction for expenses incurred
If you or your team work from home, you will be able to claim a deduction for the additional running expenses you incur.
- electricity expenses associated with heating, cooling and lighting the area from which you are working and running items you are using for work
- cleaning costs for a dedicated work area
- phone and internet expenses
- computer consumables (for example, printer paper and ink) and stationery
- home office equipment, including computers, printers, phones, furniture and furnishings – up to $300 or a decline in value for items over $300.
Expenses you can’t claim
If you are working from home only due to COVID-19, you:
- cannot claim occupancy expenses such as mortgage interest, rent and rates
- cannot claim the cost of coffee, tea, milk and other general household items an employer may otherwise have provided you with at work.
But remember, the main criteria for working from home is that you are fulfilling your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls.
You or your employees must have incurred additional expenses in some of those categories as a result of working from home due to COVID-19.
They must keep a record of the number of hours worked from home as a result of COVID-19. Examples are time-sheets, diary notes or rosters.
If you want help in calculating your running expenses, please give us call.