Claiming Home Office Expenses

(last updated 23/04/2014) 

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How to Calculate Home Office Expenses

If you perform any employment activities from home there are some expenses that can be claimed on your tax return. Ideally, you should have a room set aside as a home office.

Whilst you do not need to have a room set aside for your home office claim, if you are using a room with a dual purpose (e.g. dining room), or a room shared with others (e.g. lounge room) you can only claim the expenses for the hours you had exclusive use of the area.

Remember that home office expenses for an employee is intended to account for "running" costs, which relate to the use of the facilities in the home and include: 
  • Heating, cooling and lighting
  • Decline in value (depreciation) of home office furniture and fittings
  • Decline in value of office equipment and computer
  • Computer consumables, stationery, telephone and internet costs claimed on an actual expense basis

Method of claiming home office expenses:

Although the diary method that records actual running expenses relating to performing work in your home office may give a more acurate calculation of home office expenses, our clients almost always chose the Tax Office rate per hour method.

Using this method you can apply a fixed rate of 34 cents per hour based on the number of hours you use the home office. This method is intended to account for the cost of electricity and depreciation of office furniture, equipment and computers.

Note that "occupancy" costs, which relate to ownership of the property, are not deductible as part of home office expenses, for example:
  • Mortgage or interest costs
  • Rates and taxes
  • Depreciation on the home

E-tax Return

See these posts with tips, calculators and checklists to help you prepare your eTax Return (and get a better refund) with less hassle:
For help with your eTax return see our eTax Return Checklist.

Web Based Tax Return App:

A benefit of using eZtax, our web based tax return app, is we have the genuine online tools, knowledge and experience to get the best tax refund for our clients, making it easy to complete your annual tax return online.

Our Web Based Tax Return App will step you through all the necessary questions to increase your  tax refund and take into account all relevant tax deductions and tax offsets. Try it now. Its FREE to get started!

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