COVID 19: Working from home tax deduction

While the pandemic has forced many employees to work from home, you may be wondering if you now qualify for the home office tax deduction. We outline the requirements for employees to qualify below.

Requirements to deduct home office expenses

• You are currently employed and working for a salary / commission
• You are required by your employer to work from home
• You have an office / area that is used regularly and exclusively (more than 50%) for your work i.e. the kitchen counter would not suffice
• Your office is specifically equipped for purposes of the trade e.g. fitted with a desk, computer and printer

What expenses can you deduct?

• Rent
• Interest on bond
• Rates and taxes
• Cleaning
• Wear and tear
• Repairs to the office
• Other expenses relating to the office 

If more than 50% of your remuneration is comprised of commission you can also deduct commission related business expenses i.e. telephone, stationery, repairs to printer etc.

How to calculate home office expenses

If the expenses relate to the residence as a whole, the expense must be apportioned as follows:

A/B x total costs, where

• A = The square metre area used for work
• B = The total square metre area (including any outbuildings and the area used for work) of the residence
• Total costs = the total costs incurred for the acquisition and upkeep of the property (excluding expenditure of a capital nature)

If the expense is a specific business expense then the entire cost is deductible.

2021 tax year 

If you have been working at home due to COVID-19 you will only be able to claim this deduction for the 2021 tax year if you will have worked from home for at least 6 months of the tax year and meet the requirements above. 

If you are unsure if you qualify to claim home office expenses take our FREE pre-assessment to find out.