Due to the current health crisis, many of us have had to adapt how we work. Video conferencing, cloud file-sharing and instant messaging has replaced meeting rooms and water cooler conversations for now.

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 for under the present conditions. Here’s a quick rundown.

Working from home | What to claim and how

Expenses you can claim
If you work from home because of the COVID-19 pandemic, you will be able to claim a deduction for additional running expenses you incur between 1 March 2020 until at least 30 June 2020. 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:

  1. the short cut method,
  2. the fixed term method,
  3. 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) 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

  • your employer may be able to claim the JobKeeper payment on your behalf if you were stood down after 1 March 2020
  • your employer may choose to re-engage you and claim the JobKeeper payment on your behalf if you were terminated after 1 March 2020

Example: Employee made redundant after 1 March and later re-hired by same business

EmployeeEmployment typeSalary per fortnight
Sanjay, Personal TrainerPart Time$1,200 per fortnight

Sanjay was made redundant on 20 March 2020. In response to the announcement of the JobKeeper payment, his employer (the gym) re-engages him so they are well placed to resume their operations once the COVID-19 restrictions are lifted.

Under the JobKeeper scheme, Sanjay will:

  • 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?

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.

If you need assistance

If you need more assistance, or would like specific guidance during this time, get in touch with Dexterous Group here, drop us an email or call +61 2 9167 8880.