What are my claimable home office expenses?

If you work at home using a home office which is separate from your private home, you can claim deductions for the additional expenses you incur by working from home. Below is a list of possible expenses you can claim as a deduction:

Occupancy Expenses:

Occupancy expenses relate to the ownership/use of the home.

You can only claim occupancy expenses if your home office has the character of a “Place of Business”. To determine if your home office is a place of business the ATO will consider:

  • Is the area clearly identifiable as a place of business;

  • Is the area can be readily adaptable for private or domestic use within the home;

  • Is the area is used exclusively as a place to carry on the business;

  • Is the area is regularly visited by clients or customers;

  • Is there is an absence of an alternative place to carry on the business.

  • If your home office is considered a “place of business”, you can claim a portion of the home’s occupancy expenses. The portion of the relevant expense is calculated by:

  • Home Office Floor Area divided by Total Home Floor Area; or

  • Amount of time spent using Home Office divided by Total Time

If you use your home office out of convenience or will not be classified as a “place of business”, then you cannot claim Occupancy Expenses as a deduction.

Running Expenses:

Running expenses relate to the use of facilities within the home. Only the work-related portion of running expenses can be claimed as a deduction

Examples include:

  • Heating/Cooling & Lighting:

If you sit with family while conducting work, the ATO classifies the heating/cooling & lighting expense as private in nature and not deductible. If you use a separate, dedicated room for work activities, then the additional heating/cooling & lighting expense incurred can be deductible.

Calculate the deductible amount by:

1. Keeping records showing the amount of the expense, and the work-related portion of the expense; or

2. Home office rate (45 cents per hour).

  • Depreciation:

Home office equipment (computer, etc) depreciation can be claimed as a deduction. Home office furnishings can also be claimed as a deduction. Calculate the deductible amount by using:

1. Cost Write Off (for items costing up to $300); or

2. Decline in Value (for items costing more than $300); or

3. Home Office rate (45 cents per hour).

  • Work-Related Phone Calls:

Can be deductible if you can show you: are on call; or must phone your employer or clients regularly while you are away from your workplace.

  • Cleaning Expenses

  • Repairs to Home Office

Summary:

Disclaimer

This information is not to be relied upon without speaking to your accountant, tax agent or financial adviser depending on the advice.

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