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Australia: ATO guideline on working-from-home expenses (COVID-19)

The Australian Taxation Office (ATO) has extended the date of effect of a practical compliance guideline for employees claiming deductions for “additional running expenses” incurred while working from home.

The ATO practical compliance guideline (PCG 2020/3) addresses how to claim deductions for additional running expenses incurred while working from home because of the situation resulting from the coronavirus (COVID-19) pandemic.

The guideline now applies from 1 March 2020 through 31 December 2020 and allows taxpayers still working from home to continue to use the simplified method referred to as the “shortcut method” to claim their additional running expenses.

Expenses you can’t claim

There are some expenses you can’t claim a deduction for as an employee. Employees who work at home can’t claim costs:

  • for coffee, tea, milk and other general household items your employer may provide you at work
  • for your children and their education including
    • setting them up for online learning
    • teaching them at home
    • buying equipment such as iPads and desks
  • your employer pays for or repays you for the expense
  • for the decline in value of items provided by your employer – for example, a laptop or a phone.

Employees generally can’t claim occupancy expenses such as rent, mortgage interest, water, and rates.

For further queries related to accounts and taxation related matters, call us or visit our office. Also, visit our website for lodging tax online and to know about other services provided by us. www.kpgtaxation.com.au