Employees Working from Home – Calculating Running Expenses

The ATO have announced certain changes as a consequence of the coronavirus and the number of employees working from home.

In addition to the existing options of the “fixed rate method” and “actual cost method”, the ATO are allowing a new simplified method to calculating additional running expenses referred to as the shortcut method.

The Shortcut Method

You should be aware of the following:

  1. The method can be used for the period commencing 1 March 2020 until at least 30 June 2020.
  2. The rate is 80 cents per work hour of additional running expenses.
  3. You are working from home to fulfil your employment duties (ie not just doing minimal tasks as checking emails occasionally).
  4. You are incurring additional running expenses as a consequence of working from home.
  5. You do not have to have a separate or dedicated area set aside at home for working.

Deductible Running Expenses

  1. Electricity (lighting, running computers for work, etc)
  2. Depreciation and repair of capital items such as home office furniture.
  3. Phone and internet costs.
  4. Computer consumables (eg printer ink) and stationery.
  5. Depreciation of computers, laptops, mobile phones or similar devices.

Record Keeping

Importantly, when using the shortcut method, you will need to keep a record of hours worked at home (eg timesheets, diary notes etc).

The full announcement can be located on the ATO’s website please click here.

Kind regards

The TNR Team

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