The ATO has increased the hourly rate for claiming home office running expenses from 45 cents to 52 cents per hour from 1 July 2018.

The hourly rate incorporates expenses such as lighting, heating, cooling, cleaning and decline in value of home office items such as furniture in the area used to work.

The hourly rate does not include computer consumables, stationery and decline in value of electronic devices.

If the hourly rate method is used, taxpayers will need to keep a record of how many hours they work from home. This can be done over the course of the year or if the hours that are worked at home are regular, a diary over a representative 4 week period is sufficient.