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ATO Outlines new approach to WFH deductions
Perrier Ryan • March 6, 2023

New rate and new record keeping requirements for WFH deductions - from 1/3/2023

The ATO has released Practical Compliance Guideline (PCG) 2023/1 which outlines their new compliance approach in relation to taxpayers claiming a deduction for running expenses incurred while working from home. From the 2023 year (i.e from 1 July 2022), taxpayers will be able to use the actual method (which is based on apportioning actual expenses) or the revised fixed rate method (which is based on standard ATO rate per hour). The revised fixed rate will be 67 cents per hour and will cover: energy expenses; internet expenses; mobile and home phone expenses; stationery and computer consumables.   In addition to the revised ATO rate, the record keeping requirements have also changed. Taxpayers will now be required to keep records of: how many hours they work from home (e.g. timesheets or diaries); and one document for each additional type of running expense incurred (e.g. a monthly phone bill).   Previously, taxpayers were allowed to use records which were representative of total hours worked for an income year, such as a 4 week diary. For the period 1 July 2022 to 28 February 2023, the ATO will accept records which are representative of the hours worked from home in that period. From 1 March 2023, taxpayers will need to keep records of actual total hours worked from home. Therefore, if you wish to claim a deduction using the revised fixed rate method, you will now be required to keep timesheets, diaries or something similar to substantiate actual total hours worked from home. Please contact our office if you would like to discuss how these rules apply to your circumstances.

 

 

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