The coronavirus pandemic has forced many of us to adapt how we work. As the months roll along, video conferencing, cloud file-sharing and instant messaging has become commonplace in everyone’s virtual office.
Whether you have been directed to work from home, or you’ve been stood down, terminated or placed on leave; it’s difficult to know what you can or can’t claim from the JobKeeper extension under the present conditions. Here’s a quick rundown.
Working from home | What to claim and how
Expenses you can claim
If you haven’t yet lodged your tax return for the last financial year, you can claim a deduction for additional running expenses between 1 March 2020 and 30 June 2020 if you were directed to work from home due to the COVID-19 pandemic. For example:
- electricity expenses associated with heating, cooling and lighting the area you are using for work
- cleaning costs for a dedicated work area
- phone and internet expenses
- computer consumables (for example, printer paper and ink) and stationery
- home office equipment (including computers, printers, phones, furniture and furnishings – you can claim either the full cost of items up to $300 decline in value for items over $300.)
You cannot claim expenses like mortgage interest, rent or rates. Nor can you claim for general household items (such as coffee or tea) that your employer might usually provide if you were working in the office.
How to calculate running expenses
There are three ways you can choose to calculate your additional running expenses:
- the short cut method,
- the fixed term method,
- or actual cost method
We believe the simplest method is the new shortcut method (claim a rate of 80 cents per work hour for all additional running expenses) and so we have outlined this in more detail here. To apply this method you must be:
- working from home to fulfil your employment duties (not just checking emails or taking calls occasionally)
- incurring additional deductible running expenses as a result of working from home.
The shortcut method rate covers all deductible running expenses (outlined above under ‘Expenses you can claim’). When you lodge your 2019–20 tax return through myGov or a tax agent, you must include the note ‘COVID-hourly rate’ in your return.
Records you must keep
If you use the shortcut method, keep a timesheet or diary notes to record the hours you worked at home for your tax return. If you are using an alternative method for calculating your expenses, read what records you should be keeping here.
Employees who were stood down, terminated or are on leave
Recently, the government announced the extension of the JobKeeper program. As such, eligibility criteria has evolved to include employees who were stood down, terminated or put on leave from 1 March to 1 July 2020.
If you meet the JobKeeper eligibility criteria:
- your employer may be able to claim the JobKeeper payment on your behalf if you were stood down
- your employer may choose to re-engage you and claim the JobKeeper payment on your behalf if you were terminated
You may earn additional income (by taking up other work) without your eligible employer’s JobKeeper payment being affected. If you are eligible, ensure you maintain employment with your JobKeeper-eligible employer. However, only one employer can receive JobKeeper payments on your behalf (you may nominate another employer if your employment was terminated before 1 July 2020).
Example: Employee made redundant after 1 July and later re-hired by same business
|Employee||Employment type||Salary per fortnight|
|Sanjay, Barista||Part Time||$1,200 per fortnight|
Sanjay was made redundant on 20 July 2020. His employer (the cafe) re-engages him so they can resume operations once COVID-19 restrictions are lifted.
Under the JobKeeper scheme, Sanjay will (if eligible):
- receive $1,500 a fortnight before tax from his employer (the gym).
- need to advise Services Australia of his income. Services Australia will determine he is no longer eligible for the JobSeeker payment and the Coronavirus Supplement from Services Australia (as a result of receiving payment from his employer).
Adapted from ATO website
Are you eligible for JobSeeker?
Did this article on the JobKeeper extension clarify matters for you? If you are not eligible to be paid JobKeeper payments through your employer, you may still be able to apply for support through JobSeeker depending on your personal circumstances. To find out more about this, please refer to the ATO link here.