22nd October 2021
The ATO shortcut method for calculating your deduction for work from home expenses has been extended to 30 June 2022.
What is the Shortcut Method?
The temporary shortcut method simplifies how you calculate your deduction for working from home expenses.
Using this method, you:
- can claim 80 cents per hour for each hour you work from home
- can’t claim any other expenses for working from home, even if you bought new equipment.
The shortcut method uses one rate (80 cents per hour) to cover all of your working from home expenses such as:
- phone expenses
- internet expenses
- the decline in value of equipment and furniture
- electricity and gas for heating, cooling and lighting.
- Decline in value of all items
- Depreciation
The shortcut method is temporary. You can only use it to work out your deductions for work from home expenses:
- between 1 March to 30 June 2020 in the 2019–20 income year
- for the 2020–21 and 2021–22 income years.
Why it doesn’t suit all circumstances
Whilst a rate of $0.80 per hour might seem more beneficial when compared to the standard $0.52, at Cassell and Co we strive to achieve the best outcomes for our clients and therefore don’t use the $0.80 rate as it rarely results in the greatest deduction available.
As the name suggests, this is a simplified method introduced by the ATO for employees to calculate their working from home expenses. However, if we claim the standard 52 cents per hour for client’s home office running costs (electricity and gas), the client can still claim the work-related portion of other expenses such as phone, internet and equipment which will almost always produce a better tax result.
Find out more about this on the ATO website or give our team a call to discuss your specific circumstances.
