Hien Hoang: 0448 012 728 and Brian Spurrell: 0412 011 946

Many of you will now be accustomed to making a claim for expenses incurred whilst working from home. Some of you may have found yourselves working either part-time or full-time at home due to the impact of COVID-19 and have been entitled to a significant work related deduction and or are now continuing to work from home by choice.

In my December 2022 column I outlined proposed changes to claiming for expenses incurred in working from home during the 2022-2023 financial year as explained in the ATO Draft Practical Compliance Guideline Ref PCG 2022/D4. At the time of publication this was just a draft outline and open for comment until 30th November 2022.

On 16th February 2023 following consultation with the tax profession the proposed changes have now been finalised and explained in the ATO publication PCG 2023/1.

From the 1st July 2022, the two methods available to calculate working from home deductions are the revised fixed rate method and the actual cost method.

Revised Fixed Rate Method

The previous all- encompassing COVID-19 fixed rate of 80c is no longer available as from 1st July 2022 which may come as a surprise to many of us who in the absence of guidance to the contrary believed the 80c rate was continuing into the 2022-2023 income year.

In addition the 52c rate that was available to cover running expenses including gas, electricity and depreciation of office furniture together with all other expenses that were claimed separately is also no longer available.

Both the 80c rate and the 52c rate have now been replaced by a rate of 67c per hour as from 1st July 2022.

The expenses now covered by the new 67c per hour rate differ from the previous 52c rate and are as follows:

  • Gas and electricity
  • Phone and internet usage
  • Computer consumables
  • Stationery

The following changes make life easier in that:

  • there is no longer a requirement to have a dedicated home office space,
  • claims can be made separately for the decline in value of office furniture and technology,
  • the new fixed rate of 67c per hour can also be used by businesses that operate some or all of the time from home to claim home based business expenses.
  • the new revised method of 67c per hour can now be claimed by multiple people living under the same roof.

Actual Cost Method

This alternative method remains unchanged and is much more demanding when you have to apportion deductible expenses such as electricity, gas, phone and internet costs between work related usage and private usage. Detailed records must be kept not only of the expenditure incurred but also the methodology used to apportion shared expenses.

Record Keeping Requirements under the New Fixed Rate Method

If you elect to use the new 67c fixed rate method you will be required to keep the following records:

  • From 1st July 2022 to 28th February 2023, you must keep a record that is representative of the hours worked from home such as for a representative four week period, or diary records or correspondence from your employer.
  • From 1st March 2023 to 30 June 2023 you must maintain a record of the total daily hours worked from home such as a timesheet, roster record or diary record as well as evidence that you have paid for each of the expenses you have incurred that are covered by the fixed rate such as a gas bill or phone bill. You will also need records for any equipment you have purchased to work from home, such as technology or furniture. Records should provide details of the supplier, cost and date acquired.


There has never been a time that I can recall where the ATO has boosted up their review and audit action on claims made for work related expenses. It has been claimed that millions of dollars of over claimed deductions have occurred in the past and the ATO has given notice that evidence of over claiming, unsubstantiated claiming and claims above the norm for particular occupations will be scrutinized and pursued either by way of a review requesting substantiation of claims or a full on audit.

Tax accountants are very much aware of the risks of over claiming and are unlikely to make claims in your tax return on your behalf that you are unable to substantiate. Given the increased complexity of choices of methods to claim and substantiate working from home costs this year, do not delay in getting your records in order.

The content of this article is not intended to be relied upon as professional advice and should not be used as such. If you have any questions you should consult a registered tax agent.
Brian Spurrell B. A, B. Com, Dip. Ed, FCPA, Registered Tax Agent.
Director, Personalised Taxation & Accounting Services Pty Ltd
PO Box 143 Warrandyte 3113 Ph: 0412 011 946
Web: www.ptasaccountants .com.au