Suitable for: Anyone who is working from home and planning to claim deductions in their FY23 income tax return

Tax Difficulty: Intermediate

Airtax Experience: Anyone

Time to read: 2-3 minutes

Last updated: 16 March 2023

Changes to WFH Deductions in 2023

The Australian Taxation Office (ATO) has made changes to the way that taxpayers claim deductions for working from home.

The revised “fixed rate” and “actual cost” methods will be the only valid deduction methods for the 2023 tax return, seeing the removal of the shortcut method.

Two Options for Calculating WFH Tax Deductions in 2023

So you now have only two options to choose from when it comes to calculating your working from home expenses for your 2023 Australian income tax return.

Deciding which method is right for you

Revised fixed rate method

The revised fixed rate method allows you to claim 67 cents per hour you work from home during the relevant income year, including:

home and mobile internet or data expenses
mobile and home phone usage expenses
electricity and gas (energy expenses) for heating, cooling and lighting
stationery and computer consumables, such as printer ink and paper.

You are no longer required to have a dedicated home office to use this method.

You can claim a separate deduction for:

the decline in value of assets used while working from home, such as computers and office furniture
the repairs and maintenance of these assets
cleaning ( if you have a dedicated home office)

Actual cost method

If you prefer actual expense methodology and have been keeping records and written evidence of your expenses, showing the amount you spend and the work-use for expenses and depreciating assets, this may be suitable for you.

Eligible expenses include:

home and mobile internet or data expenses
mobile and home phone usage expenses
electricity and gas (energy expenses) for heating, cooling and lighting
stationery and computer consumables, such as printer ink and paper.
the decline in value of assets used while working from home, such as computers and office furniture, as well as any maintenance and repairs of these items
cleaning

If you choose this method, you are required to have detailed calculations and records, so the revised fixed rate method may be more suitable if you do not have this breakdown.

What records and receipts should I keep?

The ATO offer a record keeping checklist in their Working from home article for each method.

Got a Question?

To clarify any questions you have when completing your lodgement for 2023, we recommend booking in a Tax Assist call or Tax Professional call with one of our income tax specialists.

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).