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Home Office Expenses

Posted on 8 July 2013


If you carry on all or part of your employment activities from home, then you may be eligible to claim a portion of your expenses as a tax deduction.

Ideally, you should have a room set aside as a home office. The area must be clearly identifiable as a place of work and used almost exclusively for work purposes.

The expenses you can claim are:

  • Heating, cooling and lighting
  • Decline in value (depreciation) of home office furniture and fittings
  • Decline in value of office equipment and computer equipment
  • Computer consumables, stationery, telephone and internet costs claimed on an actual expense basis

Methods of claiming:

Diary method/actual running expenses

You will need to keep a diary to calculate how much of your running expenses relate to doing work in your home office. The diary needs to detail the time you spend in the home office compared with other users of the home office. Keep diary records for a representative four-week period.

Tax Office rate per hour method

You can use a fixed rate of 34 cents per hour for home office expenses for heating, cooling, lighting and the decline in value of furniture instead of keeping details of actual costs. You just need to keep a record of the number of hours you use the home office and multiply that by 34 cents per hour. Under this method you can also include the decline in value of office equipment (i.e. computers, faxes, etc.) but not furniture.

The following ‘occupancy costs’ are not deductible as part of home office expenses:
  • Mortgage or interest costs
  • Rates and taxes
  • Depreciation on the home

Contact our office for more information.

Tags:Business StructuresPlanning2013AdminTax ObligationsATOCashStrategyHome OfficeWork From Home
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