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Draft Practical Compliance Guideline PCG 2022/D4 Claiming a deduction for additional running expenses incurred while working from home – ATO compliance approach

The Commissioner has come up with his new rate for working from home deductions post COVID-19. To get this new 67 cent an hour rate you need be working from home while carrying out your employment duties or carrying on your business on or after 1 July 2022 keep relevant records in respect of the time you spend working from home 

But the big changes are

• You do not need to have a separate home office or dedicated work area set aside in your home 

• If more than one taxpayer in your household is working from home at the same time, each taxpayer will be able claim the 67 cents per hour (but if one chooses actuals then you must apportion the costs).

The fixed rate of 67c per hour for each hour you worked covers

• energy expenses (electricity and/or gas) for lighting, heating/cooling and electronic items used while working from home
• internet expenses
• mobile and/or home telephone expenses, and
• stationery and computer consumables.

So you can claim additional deductions on top of this for depreciation of office furniture and IT equipment.

Therefore to calculate your deduction for running expenses using the revised fixed-rate method, you:

• calculate the number of hours you worked from home during the income year based on your records… no records, no deduction… and multiply the total number of hours you worked from home during the income year by 67c per hour

• calculate the work-related decline in value of any depreciating assets that you used to work from home during the income year (and any other running expenses you incurred)

And so interesting examples from this draft PCG…

Example 3 – not working from home if just checking your roster

Amanda is employed as a paramedic. Her rosters are sent to her by email each week. If Amanda does not check her roster while she is on duty at her usual station, she checks the roster at home using her laptop.

This would not qualify as working from home as Amanda only occasionally uses her laptop to check her roster for the upcoming week. As such, this Guideline will not apply to Amanda.

Example 6 – not incurring additional running expenses if living with Mum and Dad

Sergei is employed as a graphic design artist. He works in the office 3 days a week and works from home 2 day per week. Sergei lives with his parents and when he works from home, he works in his bedroom using his employer-provided laptop and mobile phone. Sergei does not pay his parents any rent and he does not contribute to any of the household bills.

Although Sergei is carrying out his employment duties while working from home, he is not incurring additional running expenses. Accordingly, Sergei is not entitled to a deduction for additional running expenses and he cannot rely on this Guideline.