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Deductible Expenses for WFH Business Owners: A Guide

Remote working is now the new normal because of the coronavirus pandemic. However, the concept of work-from-home was already popular years ago, and many self-employed workers grabbed the opportunity to start their own business from their homes using the internet and computer.

Running a home-based business is ideal for many because it offers a work-life balance, flexible work hours, and comfort. Aside from those advantages, it lets you claim deductions for your costs. To learn more about the deductions you can claim, use this article as your guide.

What Are My Deductible Expenses?

Clarifying which expenses are eligible for deductions is important for your business. Failing to do so may lead you to get penalised by the Australian Taxation Office (ATO). Here are some expenses you can claim:

Furniture, fittings, and equipment

Most of your household belongings, such as your desks, chairs, and cupboards, may be deductible—even electronic gadgets, like computers and mobile phones, may be considered. However, take note that their value over time due to their age, decay, and current condition. If approved, you can list the items as an income tax deduction on your income statement.

Rent, mortgage, land taxes, and house insurance premiums

Personal services income (PSI) is income generated from your personal skills in almost any profession, trade, or industry. If the PSI rules apply to your income, then you are eligible for occupancy expenses deductions, including your rent, mortgage, house insurance premiums, and land taxes.

Utility costs

Running your business from home means you have to pay for your water, electricity, and air conditioning to ensure you work comfortably and productively. These utility costs for your work hours are deductible. However, the claim has to be made only for your property’s specific area being used as the workplace. If you have a hard time figuring this out, seek eCommerce accounting services and discuss it with your bookkeeper.

Phone and internet expenses

If you run a business that involves making lots of business calls, make sure to keep track of all of them by maintaining a call log for business and segregating them from personal calls. Book eCommerce accounting and ask your bookkeeper for assistance to ensure a more efficient process.

How Do I Calculate My Claim?

Fixed-rate method

The fixed-rate method uses 52 cents per hour to calculate hours spent working from home. If you have a bookkeeper, you can use the records from the following financial years: 2013-2014 and 2019-2020. Remember that you can’t claim the occupancy expenses while using this method if you’re an employee.

Shortcut method

Take advantage of the shortcut method for calculating your home office expenses between March 1 and September 30, 2020, if your business has been forced to work from home due to the pandemic. You can claim a rate of 80 cents per hour for additional running expenses, including electricity and gas bills.

Actual expenses method

The actual expenses method can be done within minutes using the home office calculator. It involves claiming the additional running costs while you’re working from home, including phone, internet, and electricity bills.


Sometimes, a laptop and a high-speed broadband connection are all that it takes to start earning income, which is why many set up their own business at home. It offers many benefits. Unfortunately, many work-from-home business owners are not aware that they are eligible for deductible expenses or that they can get penalised for making incorrect claims.

Remember the details mentioned above or work with skilled bookkeepers or business advisors to calculate your deductible expenses accurately.

Navigate the business world easier by working with The ECommerce Accountant. We are a team of business advisors who serve online store owners and influencers in Australia. Book a free strategy session now!

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