COVID-19 Updates: Working From Home & JobKeeper Extension

The ATO extends the shortcut method to year end

ATO releases new COVID-19 updates on claiming working-from-home expenses and JobKeeper extension

The ATO had updated its guidance on the shortcut method of claiming working-from-home expenses. You will now see that the date of application has been extended to 31 December 2020: https://www.ato.gov.au/individuals/income-and-deductions/deductions-you-can-claim/home-office-expenses/#Shortcutmethod

The shortcut method

The shortcut method simplifies how you calculate your deduction for working from home. Using this method, you can claim 80 cents per hour for each hour you work from home.

This method is temporary and can only be used to work out your work from home deduction between:

  • 1 March to 30 June 2020 in the 2019–20 income year
  • 1 July and 31 December 2020 in the 2020–21 income year

All employees who work from home during these dates can use this method if you:

  • Are working from home to fulfil your employment duties, not just carrying out minimal tasks such as occasionally checking emails or taking calls
  • Have incurred additional running expenses as a result of working from home.

The shortcut method covers all your working from home expenses, such as:

  • Phone expenses
  • Internet expenses
  • The decline in value of equipment and furniture
  • Electricity and gas for heating, cooling and lighting

If you use this method, you can’t claim any other expenses for working from home.

Key dates to keep in mind

With the commencement of the first new JobKeeper period (28 September), the payment rates for eligible employees have changed, based on the total hours each employee worked during the reference period. Your business clients will need to pay eligible employees at least the JobKeeper amount that applies to them each JobKeeper fortnight. This will be $1,200 per fortnight (tier 1) or $750 per fortnight (tier 2) before tax. Some key dates are set below:

  • Between 1 and 14 October: complete your October JobKeeper monthly business declaration to be reimbursed for payments you made in September.
  • Between 1 and 31 October: determine and submit your decline in turnover for the September 2020 quarter through ATO online systems.
  • Up to 31 October: for JobKeeper fortnights 14 and 15 (starting 28 September 2020 and 12 October 2020) only, you have until this date to pay each of your eligible employees at least the JobKeeper payment rate that applies to them.
  • Between 1 and 14 November: complete your November JobKeeper monthly business declaration to be reimbursed for payments you made in October – tell the ATO which payment tier you are claiming for each eligible employee or business participant.

If you have questions about the new updates on claiming working-from-home expenses and JobKeeper extension, please contact our Sydney tax consultants at W Wen & Co

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