The Australian Taxation Office (ATO) reminds the community that the temporary shortcut method is available to those claiming working from home deductions this year.
The temporary shortcut method was created at the height of the pandemic last year to respond to the sudden influx of makeshift home workspaces.
Assistant Commissioner Tim Loh said that “even with people shifting back to the office, we know many Australians have opted to continue working from home at least one day a week.”
The working from home shortcut method allows claims at the all-inclusive rate of 80 cents per hour, rather than needing to do complex calculations for specific items.
“The shortcut method is straight forward; just multiply the hours worked at home by 80 cents,” Mr Loh said.
“The only proof you need is a record of the number of hours you’ve worked from home, such as a timesheet.”
The temporary shortcut method can be claimed by multiple people living under the same roof. Unlike existing methods, the temporary shortcut method does not require a dedicated work area.
The shortcut is all-inclusive. You can’t claim the shortcut and then claim individual expenses such as telephone and internet costs and the decline in value of new office furniture or a laptop.
Taxpayers can still claim under the existing arrangements if they choose.
“If you decide to go with an existing method, I would encourage you to do your research and keep good records. Keeping track of each individual expense and calculating the work-related use of each one can be fiddly, so be organised. So, make sure you’ve read the guidance on our website or chat to your registered tax agent”, Mr Loh said.
Top 4 no-go expenses
If you chose to claim your working from home expenses through the fixed-rate or actual cost methods, remember you still can’t claim:
> Personal expenses like coffee, tea and toilet paper. While they might normally be supplied by your employer, they still aren’t directly related to earning your income.
> Expenses related to your child’s education, such as online learning courses or laptops
> large expenses up-front. Any asset that costs over $300 (either in total or per item), such as a computer, can’t be claimed immediately. Instead, these claims should be spread out over a number of years
> Employees generally can’t claim occupancy expenses such as rent, mortgage interest, property insurance, land taxes and rates. Working from home does not mean your home is a place of business for tax purposes. If you claim occupancy expenses, you may have to pay capital gains tax when you sell your home, even if it is your main residence.
Three different methods for 2020-21
You can choose one of three ways to calculate your additional work from home running expenses for this tax time:
· claim a rate of 80 cents per work hour at home for all your working from home expenses;
· claim a rate of 52 cents per work hour at home for the heating, cooling, lighting and cleaning of your dedicated work area and the decline in value of office furniture and furnishings. Then calculate the work-related portion of your telephone and internet expenses, computer consumables, stationery and the decline in value of a computer, laptop or similar device.
· claim the actual work-related portion of all your running expenses, which needs to be calculated on a reasonable basis.
Remember, to claim any work-related expense, you must have spent the money yourself and not been reimbursed. The expense must be directly related to earning income (not a private expense). You must have kept any necessary records (a receipt is best).
Additional information
More information about working from home is available at ato.gov.au/home.
Small business Answers guide to tax returns can be found here.
A recent US survey of over 3000 IT professionals found that even offering them a A$40,000 rise could not entice 64% of them back into the offices. It looks like the COVID WFH-itis (Work-from-Home-itis) is here to stay.
Now before you take sides – work from home or work from an office – the COVID pandemic and lockdowns over the past 12 months have proven that for many non-public facing staff, WHF-itis’ works. Conversely, employers have reasonable rights to expect a return to the office.
US lawyers are salivating over the possibility of massive class actions enshrining WFH as a significant part of the work-choice landscape. Changing employment laws on a state-by-state and whole of government basis will take years. It seems there is the determination to fight for WFH.
A national survey conducted by the Australian Fair Work Commission last year found that only about 5% of WFH workers want to return to the office on a full-time basis. And 35% want to return on a part-time basis only. That leaves 60% who want to maintain WFH. That is unlikely to change until COVID is no longer a threat.
That reflects the Team Blind US Survey results – 64% want to remain WFH and expect a US$30,000 (A$40,000) rise to return to the office. Now, one can argue that the figure is rubbery, and you would be right.
It is more about the ‘principle’ after another US employer-sponsored survey asked if employees would be prepared to take a pay cut to continue to WFH. That incendiary, lead balloon survey assumed that money saved by not having to travel to work, eat take-out etc., should be shared with the boss.
There is a rapidly disappearing middle ground with each side having polarising views.
The Australian WRH-itis legal quandary
Like the US, each Australian State sets awards and work conditions. Federally there are safety nets dictated by Fair Work Commission.
Fair Work Australia (Coronavirus website here) has made it clear that because employment law varies from State to State, there is no one ruling and probably no value in testing each State’s law.
COVID lockdowns forced changes in work patterns and business survival never contemplated by the Fair Work Act, various awards, employers, and employees. Those changes include employees setting up home offices, buying and depreciating equipment, higher energy and internet expenses, making commitments (like moving to larger homes with office space), childcare arrangements and even taxation claims for home offices. These may be things that you cannot undo quickly or easily.
Union/Employee views
Unions say that WFH employees who can reasonably show no productivity loss have a solid case to renegotiate any employer’s expectation of working at the office. The key here is they were employed under one circumstance. Those circumstances changed. They continued to do a good job, and the expectation changed by virtue of the employer requesting WFH.
Unfortunately, few employees have proved metrics for WFH versus office productivity. Unions are quick to remind employees that the absence of any written warnings from employers about a loss of productivity strengthens the WFH position. You can be sure that productivity metrics will become part of future work at the office and WFH employment agreements.
Given the employee has done a good job, the employer may not want to lose their expertise or loyalty (hard things to replace). Fair Work states, ‘Employers should continue exploring alternative working arrangements in their workplace, particularly while social distancing rules apply, such as supporting different types of work from home arrangements where possible.”
The ideal outcome is not termination but negotiation for WFH flexibility. Perhaps flexible work hours (to avoid transport peaks), two-to-three days a week in the office and the rest at home. And if there is a change of duties (what you did before and now after return), the employer must negotiate fairly with you. They can’t cut your salary but should remunerate you if they ask for additional duties.
Employer views – Work From Home
Employers need some sympathy – if they went out of business, there would be no jobs. They reasonably expect that employees will be on tap at the office. After all, workplace culture – that Je ne sais quoi – is what makes their company different to anyone else. Leadership and relationships from top to bottom.
Fair Work states that the employer has a reasonable right to request a return to a ‘safe’ workplace if that was where you worked when you were employed. Those employed during the lockdown may have a legal loophole to continue WHF!
Please note that both Fair Work Australia and various medical authorities have said that until the vast bulk of Australian’s are immunised, and herd immunity prevails, employees have legitimate concerns about returning to the office or using public transport. They cannot be terminated on these grounds if they refuse to return to the office.
To be even fairer to the employer, they have long term commitments to real estate space, equipment, and other fixed overheads. Many are reassessing how the business will look in the future and downsizing to shared facilities etc. It may take a mind shift to go fully digital and get over the need for permanent office space.
And there is the issue of employer data security. The incidence of highly targeted email spear phishing, business payment scams, business email compromise, and data exfiltration from compromised employee computers has skyrocketed. All because work is being done remotely from largely unsecured computers.
Bottom line – if you refuse to return to the office except under certain conditions (like a legitimate fear for your health and safety in workspaces or catching COVID on public transport), your employer can terminate your services.
The Fair Work Commission has a Swinburn University paper ‘ key working from home trends emerging from COVID- 19’ here.
What is a COVID safe workplace?
A COVID-safe workplace means that the employer has to guarantee that protocols are in place to prevent the transmission of COVID to staff. Failure to do so and contract tracing evidence that COVID emanated from the workplace makes the employer liable for civil court action.
By the way – an employee cannot give up their right to a safer workplace. Even if you cut the boss some slack and don’t follow protocol, it does not lessen their liability. It is not negotiable.
Marshals and temperature measurement on entry depending on the business size
Registration as a COVID safe business
COVID tracking sign-in and out (record keeping) for employees, suppliers, contractors, and clients
Physical distancing (1.5m rule and social distancing between desks)
If required, sneeze guard partitions
No hot desks or equipment without COVID safe cleaning in between uses
Cleaning and hygiene for any shared areas like lifts, kitchens, toilets, break rooms etc. several times a day
Alcohol-based sanitiser at multiple locations throughout the workplace, including entry and exit points
Disinfectant surface wipes to clean workstations, printers, phone handsets, keyboard, and mouse
Flexible work times to help avoid peak transport times
No gatherings in boardrooms unless they meet social distance rules – video meetings preferred
Contactless deliveries where possible
Increase natural ventilation by opening windows and doors, and increase mechanical ventilation by using air purifiers, maximising the intake of outside air and reducing or avoiding recirculation of air
A WFH backup plan and home quarantine plans just in case
Can my staff work from home?
We covered this because the Blind Teams survey was on the mainly desk-bound IT industry that uses collaboration to do their best work. It does not cover front line responders and public-facing staff who face a very different working landscape.
Our key message to both employees and employers is that talking about the issue is preferable to the alternative. In many respects, and particularly as neither party can sign their rights away, it all boils down to flexibility until COVID is no longer a threat. And hopefully, no other pandemics come our way.
