COVID19 has brought a changed reality to many parts of our daily lives, travel, public health and the nature of work. As the vaccination program rolls out we may see some of these activities revert back to the pre-covid world, but it is more likely the nature of how and where we work has changed forever. This means that we need to look differently at the very nature of work related expenses.
Working from home expenses
The temporary shortcut method for working from home expenses is available for the full 2020-21 financial year. This allows an all-inclusive rate of 80 cents per hour for every hour people work from home, rather than needing to separately calculate costs for specific expenses. All you need to do is multiply the hours worked at home by 80 cents, keeping a record such as a timesheet, roster or diary entry that shows the hours your worked. However, please note that using the short cut method means that you can’t claim a separate deduction for other home office expenses such as internet, telephone, electricity & gas or new furniture or equipment such as IT. You may actually find it results in a bigger deduction to use the old fixed rate plus claim the separate deductions where appropriate.
And remember – the shortcut method was only temporary to 30 June 2021. Going forward, you’ll still need your records to show how many hours you worked from home plus receipts for any expenses you want to claim (if total work related expenses exceed $300).
Personal protective equipment (PPE)
If your specific duties require physical contact or close proximity to customers or clients, or your job involves cleaning premises, you may be able to claim items such as gloves, face masks, sanitiser, or anti-bacterial spray.
This includes industries like healthcare, cleaning, aviation, hair and beauty, retail and hospitality.
To claim your PPE, you’ll need to have purchased the item for use at work, paid for it yourself, and not been reimbursed. You also need a record to support your claim – a receipt is best.
Clothing and laundry, self-education, car and travel expenses
In 2020, we saw a decrease in the value of work-related expenses for cars, travel, non-PPE clothing and self-education as a result of the introduction of travel restrictions and limits on the number of people who could gather in groups. We expect this trend to continue in the 2021 tax returns.
If an employee is working from home due to COVID-19, but needs to travel to their regular office sometimes, they cannot claim the cost of travel from home to work as these are still private expenses.
ATO Occupation & Industry guides for deductible expenses
To help people work out what they can and can’t claim, the ATO has created nearly 40 occupation and industry guides. This year they have added three new guides for gaming attendants, community support workers and recruitment consultants.