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Highlights
- In 2018-2019, the number of working from home people in Australia was around 3 million, which increased to over 4 million as the pandemic hit.
- Designed by the Australian Taxation Office, the work-from-home tax relief provided significant relief to millions of Aussies.
- Claiming office expenses will impose further administrative challenges for Aussies under fixed-rate method.
Covid-19 pandemic brought numerous financial troubles for Aussies. However, there have been instances of relief as well. For example, the working from home tax deduction significantly relieved several Aussies' tax payments. Nonetheless, good things often last for a limited time, such as the working from home tax claim, which would end in the financial year 2022.
So, what has working from home tax deduction been all about?
Since March 2020, as the pandemic spread and more people started working from home, the government provided Aussies working from home an option to claim work-related deductions of 80¢ per hour for each hour they worked from home during the pandemic.
In Australia, a significant number of people worked from home even before the pandemic. However, since March 2020, the numbers have grown massively. For instance, in 2018-2019, the number of working from home people was around 3 million, which increased to over 4 million as the pandemic hit.
And how did it work?
Designed by the Australian Taxation Office, the work-from-home tax relief provided significant relief to millions of Aussies. So, for claiming the relief, Aussies were required to keep a record of the number of working hours from home in a timesheet or a diary.
Under the relief, Aussies were provided deductions for the phone services, internet, heating, and cooling, etc. This way, both the employed people and the businesses received help in maintaining finances. However, it is saddening that the Covid-19 tax shortcut is ending on June 30, thus posing new complexities for Aussies.
Source: © Luislouro | Megapixl.com
Life of taxpayers from July 1
Claiming work-related expenses became easier and more customised for taxpayers under the Covid tax shortcut. However, as the said relief ends, taxpayers will need to claim their work-related expenses via the fixed-rate method.
New complexities might emerge for the taxpayers as most of the Aussies are either working entirely from home or in a hybrid system. Thus, claiming office expenses will impose further administrative challenges for Aussies under the fixed-rate method.
Apart from the administrative challenges, the fixed-rate method will also impose financial difficulties because the current plan does not include telephone and internet expenses or depreciation on office equipment.
Conclusively, as the shortcut method ends, Aussies may face new challenges under the fixed-rate plan. However, if modifications are made in the fixed-rate process, considering the number of Aussies working from home, the situation may get milder for people.
