Australians working from home required to keep diary of every hour from March 1

Australians working from home will be required to keep an hourly diary at work from next month, and accountants predict the new rules will leave them $629 a year worse off.

The tax office has announced that starting March 1 they will no longer accept estimates of how many hours someone worked from home or even a four-week summary at the end of each month.

Those who claim phone and internet bills on their tax return will not be eligible to claim a new flat, flat rate of 67 cents an hour, effective July 1.

Accountants H&R Block and Johnston Advisory said this would leave the average home-based professional $629 a year worse off.

Tim Loh, assistant commissioner of the Australian Taxation Office, said that professionals working from home would need to keep track of hours worked at home, through a diary, time sheets, rosters or a computer log of the employer.

“No matter which method you use, be sure to keep records,” he said Thursday.

“This will give you more flexibility to choose the method that provides the best deduction at tax time, based on your circumstances.”

Loh said those affected would also have to prove they were working from home “to fulfill their job duties, not just to perform minimal tasks like checking emails or taking calls from time to time.”

H&R Block’s director of tax communications, Mark Chapman, said the changes would leave Australians worse off working from home rather than the office.

“This new flat rate is clearly to the disadvantage of most taxpayers,” he told Daily Mail Australia.

“In addition to producing a lower deduction, there are much stricter record-keeping requirements.”

Ben Johnston, managing director of accounting practice Johnston Advisory, said the new rules would come as an administrative shock.

“These are far more onerous obligations than I might have been used to,” he told Daily Mail Australia.

Tamara Burns, a chartered accountant with PB Taxation Services in Port Macquarie, said the new rules would be particularly difficult for those who split their week between home and office.

“The requirement to now record every hour worked from home places a huge administrative burden on the individual,” he said.

‘The impact of this change is enormous.

‘There are countless jobs where employees do some level of work at home.’

Ms Burns said that teachers who traditionally marked homework assignments would also be particularly affected.

“Teachers are a prime example of an occupation that will be greatly affected by this requirement,” he said.

“On top of all the work they are expected to do, the fact that they also have to keep records 365 days a year, instead of just four weeks, to justify their work is just complete red tape gone haywire.”

Starting July 1, those who work from home will be able to charge a new flat rate of 67 cents an hour.

This will replace the old rate of 52 cents for those who also made manual deductions, and the old flat rate of 80 cents an hour that was allowed from March 2020, at the start of the pandemic, until June 30, 2022.

H&R Block and Johnston Advisory calculated that the changes would leave the average WFH professional $679 a year worse off.

Under the existing 52p an hour rule, the typical Australian working from home could claim a total tax deduction of $1,379, with this fixed outbound rate allowing them to also claim mobile phone and internet bills and stationery in addition to the hours they they work from home, as long as they had receipts.

But under this new 67 cents an hour rule, that drops to $750.

That’s even less than the $876 average of the discontinued 80-cent-per-hour flat rate where no receipts were required for an assumed cost of phone, Internet and electric bills.

The new rules will prevent someone from claiming the flat rate for every hour worked from home if they also want to manually claim phone and internet bills.

“Everything that is included in the flat rate (energy costs, internet costs, phone/mobile expenses, stationery) can be claimed separately, but by doing so, you won’t be able to claim the flat rate at all,” Johnston said.

“So if you want to claim the mobile phone expenses separately, you can, but you can’t claim the flat rate at all, even for the other expenses.”

Loh argued that the 67 cents per hour rate was enough to cover phone bills, which must be itemized under existing rules.

“Items that are difficult and tedious for everyday Australians to calculate actual work usage, such as telephone, internet and electricity charges, are included in the revised rate,” it said.

But Johnston said the new flat rate, while higher than the outgoing rate of 52 cents an hour, had much stricter conditions.

“Don’t believe the ATO doctors that this is an increase, it is not,” he said.

For 2022-23 tax returns, the ATO will accept a four-week journal covering the total number of hours worked at home from July 1, 2022 through February 28, 2023.