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The finalised guidance, released yesterday, introduces stricter record-keeping requirements and a fresh rate per hour.
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ATO sticks to its guns in revised WFH deductions regime
16 February 2023
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The ATO has stuck to a fixed-rate deduction of 67c an hour in its revised work from home (WFH) regime but changed the start date for more stringent record-keeping to 1 March after feedback from the industry.
The compliance change, which was scheduled for 1 January in draft PCG 2022/D4 published last November, was a partial win for critics who said most taxpayers and accountants would be unaware of the revised requirements and lose out.
The industry is understood to have favoured starting the tighter record-keeping regime from 1 July 2023.
The finalised WFH guidance, released today, fills a void left when the pandemic shortcut method was scrapped last July and cuts the options to either the new fixed rate method or the actual costs method.
However the guidance fails to address questions about how the 67c rate was calculated and leaves taxpayers who lack a dedicated workspace the task of recording every hour they work from home.
“The ATO won’t accept estimates, or a four-week representative diary or similar document under this method from 1 March 2023,” it said.
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It said taxpayers should keep records “as they occur” as “timesheets, rosters, logs of time spent accessing employer or business systems, or a diary for the full year”.
Those claiming 67c an hour will also need to keep bills for costs included in the fixed rate, which covers electricity, gas, phone, the internet, stationery and computer consumables.
Separate claims can be made for depreciation of computers or office furniture, repairs, cleaning and maintenance. The threshold cost for depreciation of an asset remains at $300.
Assistant commissioner Tim Loh said taxpayers “carrying out minimal tasks, such as occasionally checking emails or taking calls” were ineligible to claim because “you must be working from home to fulfil your employment duties”.
Taxpayers must also incur additional expenses as a result of working from home and he advised everyone to keep records so that they could choose which method suited them best.
Mr Loh said the revised guidance would be a boon to taxpayers.
“Items that are difficult and tedious for everyday Aussies to calculate actual work-use, like phone, internet and electricity expenses, are included in the revised rate,” he said.
“Assets and equipment that typically give taxpayers a bigger deduction, such as technological items and office furniture, are not included in the revised rate and need to be claimed separately.
“Another benefit is that you no longer need a dedicated home office to use the fixed rate method.”
Earlier this month, the ATO told Accountants Daily it would conduct a publicity campaign to alert taxpayers to the revised methods.
“We will be undertaking a range of communications through various channels that will coincide with the publication of the final PCG later this month,” the ATO said.
“Communication after publication of the final PCG will be ongoing and continue into the period for lodgement of 2023 income tax returns.
“We are developing supporting materials, including web content and a fact sheet to assist taxpayers and their advisers.”
Mr Loh said the ATO would accept a representative record of hours worked from home for the period 1 July 2022 to 28 February 2023, but after that “taxpayers will need to record the total number of hours they work from home”.
“And remember, you can’t claim for things like coffee, tea, milk and other general household items, even if your employer may provide these kinds of things for you at work.”
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