Fixed rate for home-based business expenses

Taxpayers who operate some or all of their business from home may be able to claim the business-use portion of expenses they incur. These include:

• occupancy expenses (such as mortgage interest or rent, council rates, land taxes and home insurance premiums). However, there may be CGT implications on disposal of your home.
• running expenses (such as electricity, gas, phone, internet, stationery, cleaning and the decline in value of assets).

If clients are looking to use the fixed rate method, the revised fixed rate from the 2022–23 income year is 67 cents per hour. Taxpayers no longer need to:

• have a dedicated home office space
• work out the business-use portion of phone, internet, gas and electricity separately.

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

If taxpayers want to use the revised fixed rate method, they 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 taxpayers have not kept a record of all hours worked from home, they can use a representative record of their hours from 1 July 2022 to 28 February 2023. They will need a record of the total number of their actual hours from 1 March to 30 June 2023.