ATO Guidance: Working From Home Shortcut

The Australian Taxation Office has extended the working from home (WFH) shortcut method to 30 June 2022.

The temporary shortcut method has been available for employees who worked from home and incurred some additional running expenses as a result.

It allows them to easily work out their WFH expenses from 1 March 2020 to 30 June 2020, and the whole of the 2020–21 income year.

Its extension — due to the continued extenuating circumstances of COVID-19 and continued lockdowns since 1 July 2021 — means that the 80 cents per hour method is now also available for the whole of the 2021–22 income year.

Employees may continue to use either of the alternative methods:

▪️ Fixed-rate method (52 cents per hour); or
▪️ Actual cost method.

These two methods will be the only options for claiming deductions for WFH expenses after 30 June 2022.

It is important that employees keep an accurate record of the number of hours they have WFH, such as a timesheet, roster or diary. This will be needed back to 1 July 2021 for claims that include the period from the start of the 2021–22 income year until now, as well the remainder of this income year.

Further information is available here:

https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Home-office-expenses/Shortcut-method/

For the 2022–23 income tax return, the ATO is looking to modernise the 52 cents per hour fixed rate method to make it easier and simpler to use, given that, increasingly, Australians will be WFH in the longer term. The ATO will provide further information on this later.