New changes to home-based business expenses

If you operate some or all of your business from home, you may be able to claim the business-use portion of expenses you incur. For example:

• occupancy expenses (such as mortgage interest or rent, council rates, land taxes and home insurance premiums)

• running expenses (such as electricity, gas, phone, internet, stationery, cleaning and the decline in value of assets).

The temporary shortcut method ended on 30 June 2022, and the fixed-rate method has been revised.

For the 2022–23 income year, the revised fixed rate is 67 cents per hour. You no longer need to:

• have a dedicated home office space

• work out the business-use portion of phone, internet, gas and electricity separately.

You can also claim the decline in value of depreciating assets and equipment separately, including any repairs and maintenance costs.

If you want to use the revised fixed rate method, you need to keep a record of all hours worked from home for the entire income year (for example, on a timesheet, roster or in a diary).

If you haven’t kept a record of all hours worked from home, you can use a representative record of your hours from 1 July 2022 to 28 February 2023. You will need a record of the total number of your actual hours from 1 March to 30 June 2023.

Your business structure can also affect the method you can use and the expenses you can claim.

Remember, your tax professional or BAS agent can help you with your tax.

Last modified: 10 Mar 2023QC 71777