Increase to rate for working from home running expenses

PCG 2023/1 outlines the ATO's new method ('the fixed-rate method') for calculating additional running expenses while working from home, which has applied from 1 July 2022.

The fixed-rate method allows taxpayers to claim at a rate of 70 cents per hour from 1 July 2024 (2025 income year) for the following additional running expenses for working from home:

• energy expenses (electricity and gas) for lighting, heating, cooling, and electronic items used while working from home;

• internet expenses;

• mobile and home phone expenses; and

• stationery and computer consumables.

However, PCG 2023/1 does not cover occupancy expenses relating to a home, such as rent, mortgage interest, property insurance and land tax.

Taxpayers are not required to use the above fixed-rate method — as from 1 July 2022, they can instead choose to claim the actual expenses they incurred as a result of working from home and keep all records necessary to substantiate their claim.