COVID-19 National: Business, Individuals – Support for Employees Working from Home

This program aims to provide support to employees who are working from home due to the COVID-19 pandemic by allowing them to claim at tax time for the running expenses they incur.

To claim a deduction for working from home, all of the following must apply:
- The employee must have spent the money.
- The expense must be directly related to earning their income.
- The employee must have a record to prove it.

This means employees cannot claim a deduction for items provided by their employer or if they have been reimbursed for the expense. If they are not reimbursed by their employer, but instead receive an allowance from them to cover the expenses when they work from home, they:
- Must include this allowance as income in their tax return.
- Can claim a deduction as outlined in the ATO website.

There are three ways to choose to calculate additional running expenses:
1. Shortcut method
- Employees can claim a deduction of 80 cents for each hour they worked from home fro the period between 1 March 2020 to 30 June 2020 in their 2019-20 tax return and 1 July 2020 to 30 June 2021 in their 2020-21 tax return as long as they:
a) Were working from home to fulfil their employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls.
b) Incurred additional running expenses as a result of working from home.
- This method doesn’t require employees to have a dedicated work area, such as a private study.

2. Fixed rate method
- Employees can claim a deduction for additional running expenses they incur when they work from home. The fixed rate is 52 cents for each hour they work from home. The rate covers the additional running expenses they incur for:
a) The decline in value of home office furniture and furnishings – for example, a desk
b) Electricity and gas for heating, cooling and lighting
c) The cost of repairs to their home office equipment, furniture and furnishings.
- To claim using this method, employees must keep records of either:
a) Their actual hours spent working at home for the year.
b) A diary for a representative four-week period to show their usual pattern of working at home.
- Employees can apply the four-week representative period across the remainder of the year to determine their full deduction amount. However, if their work pattern changes they will need to create a new record.
- To use this method, employees need to have a dedicated work area, such as a home office when they work from home.

3. Actual cost method
- Employees can claim a deduction for additional running expenses they incur when they work from home.
- Using the actual expenses method, employees will work out their deduction from actual costs they incur as a result of working from home.

Regardless of the method the employee choose to use to calculate the expenses for working from home, they will need to have records.

If their circumstances change part way through the income year – for example, their usual pattern of work from home changes – they will need to keep separate records to show this change.

Please visit the website for more information.

Eligible applicants include Australian employees who work from home or whose working arrangements have changed during the COVID-19 pandemic.

Please refer to the website for the list of expenses that can be claimed for each method.

The following expenses cannot be claimed:
- The cost of coffee, tea, milk and other general household items the employer may otherwise have provided the employee with at work.
- Costs related to children and their education, including setting them up for online learning, teaching them at home or buying equipment such as iPads and desks.
- Items that the employee have reimbursed for, paid directly by their employer or the decline in value of items provided by the employer – for example, a laptop or a phone.
- Time spent not working, such as time spent home schooling the children or lunch break.
- Occupancy expenses such as rent, mortgage interest, water and rates.