The ATO has updated the hourly rate taxpayers can use to determine deductions for home office expenses from 45 cents to 52 cents per hour for individual taxpayers, effective 1 July 2018 (i.e. from the 2019 income year).
According to the ATO’s recently updated PS LA 2001/6, individual taxpayers who claim deductions for either work or business-related home office running expenses may either:
- claim a deduction for the actual expenses incurred; or
- calculate the running expenses at the rate of 52 cents per hour.
Taxpayers who use the rate per hour method to claim a deduction for home office running expenses only need to keep a record to show how many hours they work from home.
This reduced substantiation requirement can be recorded either:
- during the course of the income year; or
- they can keep a representative four-week diary (where their work from home hours are regular and constant).