To help you to get your head around the income tax implications of working from home, we’ve created a handful of scenarios. We don’t expect these to suit everyone’s circumstances but we’ve done our best to capture the most common situations. If these scenarios don’t match your circumstances, have a read of our other working from home tax content. This covers what you can claim and how you calculate deductions for your home office expenses plus we have some simple guides too.

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Five working from home tax scenarios

Tilly - works 40% at home and 60% in the office for a major bank

Jose - he’s working from home a couple of days a week off his kitchen bench

Peter - he’s normally on a worksite, but they are closed, so is working at home

Rohit - he’s an employee and does some gig economy work in his spare time

Charlotte - she’s a sole trader and works at home a lot

Tilly - works 40% at home and 60% in the office

Normally working in the city, Tilly works in a leadership role for a major bank and has flexibility to work from home.

As a result:

• Tilly can take advantage of the fact she has a dedicated home office and is able to claim back some of her gas and electricity costs, which she does using the cents per hour method. She keeps a record of the number of hours worked and multiples by the ATO agreed rate of 67 cents per hour.
• In addition, she also purchased a monitor and riser for this period of work, which her employer did not reimburse. They were under the $300 threshold which means she can claim them back on her tax return in full. She just needs to keep the receipt in order to do so.
• Despite numerous conversations with her partner about whether this is possible, she can’t claim a portion of the rent whilst working at home - it is considered a private expense.

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Jose - he’s working from home a couple of days a week off his kitchen bench

Working for a health services provider in administration, Jose is able to work from anywhere thanks to his company’s policy. For most of this last financial year, he’s been working at home a couple of times a week and lives in a one bed apartment, which means he tends to work off his kitchen bench.

As a result:

• Jose is able to claim his internet and phone expenses (which are not paid for by his employer) and he does this by keeping a diary of actual usage. He finds this the easiest way to do so. He wanted to claim his cleaning costs using the same method, but he can’t since he doesn’t have a dedicated work area. 
• He is considering buying a new headset, which is under $300 and if he does, he knows he can claim this in full in his tax return. 
• He was also hoping to claim the depreciation for his light fittings, carpets and curtains because his friend does. Unfortunately since Jose doesn’t have a dedicated work area he is unable to do this.

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Peter - he’s normally on a worksite, but they are closed so is working at home

Peter is a structural engineer, who works for a firm spending 25% of his time in the office and 75% of his time on a worksite. Due to current conditions, he is not working at either the office or worksite.

As a result:

• For the time being, he is working at home and can claim his internet and phone using the actual method, and his gas and electricity which he does using the 67 cents per hour method. 
• Peter also took a trip to a local store and spent $1,500 on a new specially designed ergonomic office chair, monitor, mouse, keyboard and stand up desk. He is going to use the depreciation method, and he has calculated to depreciate the $1,500 over a 4 year period. 

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Rohit - he’s an employee and does some gig economy work in his spare time

Working day to day as a developer leaves Rohit a little time to work in the evenings on his freelance projects. The company Rohit works for does not provide his equipment (laptop, etc.) for working and he uses his own. He also uses this for his freelance work which he does under his own ABN.

As a result:

• Since Rohit has purchased his own equipment (laptop, printer, office furniture) for working, he is entitled to depreciate the cost of this, but must separate out any private usage which is not claimable.
• Additionally Rohit can claim the expenses he incurs for his phone and internet usage.
• Rohit keeps a detailed diary log of his expenses, which includes the amounts he spends, the number of hours he works and receipts of the items he has purchased (including amounts).
• Since Rohit is a sole trader who has his own ABN and is registered for GST, he also submits quarterly BAS returns and his annual tax return includes expense items within the sole trader section of his tax return.

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Charlotte - she’s a sole trader and works at home a lot

Charlotte works for herself as a freelance writer which means she spends most of her days at home in her own office space. She has set up a desk, computer, and printer in her study which is used entirely for business (with no private use). Charlotte also has a separate phone that is used entirely for taking business calls.

As a result:

• Charlotte is able to claim a deduction for the decline in value of all of her office equipment, including the computer, extra monitor, desk, and chair. 
• As her phone is used entirely for a business purpose, Charlotte is able to claim a deduction for her calls and data, as well as the amounts she pays each month for the phone itself.
• It appears Charlotte may be running a business from her home and if this is the case, Charlotte is able to claim a deduction for her rent and home insurance (occupancy expenses). These amounts need to be apportioned so that the deduction claimed only represents the costs that relate to her study. To calculate this, Charlotte will need to divide the floor area of her study, by the total floor area of her home. She can then apply this rate against her occupancy expenses (e.g. rent and insurance).   

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Read more about working from home (WFH) tax

Visit our working from home tax hub which includes the latest on the new ‘shortcut method’ to calculate WFH deductions, frequently asked questions, how to calculate WFH deductions, working from home guides and more. 

This document merely provides a broad outline of the subject and is necessarily general in nature.  If you require specific advice, which is tailored to your specific circumstances, please do not hesitate to contact us (fees would apply).