Covid – Tax Deduction “Perks”

Covid19 has been a horrid time for many Australian small businesses and employees. The government have released some measures to soften the blow and financial burden to employees, so let’s take a look. 

There has always been an hourly rate you can claim to cover electricity, heating and general use of your home while working. The historic rate of 52cents per hour still stands, and under this method you can still claim a percentage of telephone etc. however, with the influx of working from home during Covid19, the ATO has implemented an 80 cent catch all rate.

To claim the cents per hour working from home, simply keep a logbook or diary to calculate the number of hours you have spent working from home. It might be as simple as a date range until you were allowed to return to the office, one day a week, or a week working from home while isolating as a close contact. Every 80 cents adds up. 

The ATO have recently passed legislation that allows the deductibility of Covid tests that you use personally to enable you to go to work. This means if your employer requires you to do a test to return to work, to come in with any hay fever symptoms, or because of any exposure, you can claim these on your tax return. You need to keep the tax invoice for these tests. 

Because this rule came in part way through the financial year, that is 31 March 2022, the ATO have said that they will take bank or credit card statements, or diary proof showing the regularity of tests etc. as a basis for the claim. 

Similarly, business owners can now claim tests they may purchase to provide to staff, or have on hand for staff use. These used to be considered a fringe benefit, but the above legislation essentially makes them FBT free under the otherwise deductible rule.

I think most states have been subject to mask mandates and employees of all job types have had to don face masks to attend work. If this is the case for you, where you have a tax invoice (receipt), you may be able to claim your face masks. If you’re personally buying other PPE, say in the health sector, this may also be deductible to you. 

It is important to note that with these deductions, and all work related deductions, there must be a clear connection to you incurring the expense and paid work.

If you’re at all unsure of what you can claim on your 2022 income tax return, contact your local Accru office today and speak to one of our tax specialists.