The ATO has announced revisions to the way individuals working from home can claim deductions. 

Taxpayers may choose between an “actual cost” or “fixed rate” method to claim. The recent changes, however, only apply to the “fixed rate” method and come into effect from the 2022-2023 financial year.

The ATO’s alterations are designed to simplify the process of calculating the portion of which an item was used specifically for work, as opposed to personal use. Under the fixed rate method, this includes deductions such as phone, internet and electricity expenses.

Larger deductions, such as technology items or furniture, are not part of the revised fixed rate and must be claimed separately. 

Another aspect of the “fixed rate” method that has changed is the eligibility terms. Now, individuals no longer require a dedicated home office to be eligible to claim under this method. This comes as a welcome change to many, particularly considering the steep increase in the number of individuals working from home following the impacts of the coronavirus.


Tim Loh, assistant commissioner of the ATO stated that these changes “better reflect contemporary working from home arrangements.”

The Fixed Rate Method

The cents per work hour rate has now increased from 52 to 67 cents.

Items Included

  • Energy costs (electricity and gas)
  • Phone expenses (mobile and landline)
  • Stationary/eligible office supplies
  • Internet
  • Computer Consumables

Record Keeping

  • Record of the exact hours worked in the income year are required
  • Original records of hours are acceptable (eg. rosters, timesheets, work logos or a full-year diary)
  • Bills for each expense included under the fixed rate (for example, an electricity bill)

We are here to help…

At Tax Negotiators, our friendly team can guide you through the complicated tax system to maximise your income tax return. Additionally, if you are struggling with ATO debt we can formulate a comprehensive strategy to get you back on track and prevent history from repeating itself.

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