An estimated 1-in-4 Australians are working from home and while the coronavirus pandemic may be causing isolation issues, it’s offering many the chance to save big bucks.
Finance experts say by working from home, people are spending significantly less of their discretionary income on day-to-day expenses, including petrol, parking, public transport and lunches.
That morning coffee on the way to work is also a thing of the past and there’s no catching up with mates at the end of the day for a drink or two.
Financial adviser Glen James surveyed almost 1200 millennials on their experiences of working from home and found 69 per cent were saving $50-$150 a week.
He said the results suggested Australians should reassess their personal budgets and consider changing their habits to put more money towards personal financial goals.
“It is about being agile with our personal spending,” Mr James told AAP.
“What habits can you make now to determine what’s a luxury or a necessity and making changes that better help you when we come out of this.”
For those questioning their job security as the pandemic worsens, Mr James also suggested using the current savings to build a cash buffer.
Financial services worker Jason de Lorme said by no longer spending money on coffees, lunches with colleagues and petrol, he could save $300 a month working from home.
“I’m a little surprised by the amount I’ve saved. I didn’t expect it to be quite that much,” he said.
“I didn’t really take into consideration things like petrol and the commute time and how much that might chew through and then coffees and interactions.”
Mr de Lorme said while some costs could increase, savings would likely outweigh them.
“Being home, you cook more so there is more washing up so that’s the water costs and groceries, so we’re making sure we don’t increase it too much,” he said.
But many working-from-home costs – including higher power bills and internet charges, and some costs associated with setting up a home office – could be tax-deductible.
Tax agent Mark Chapman suggested recording working hours and keeping track of receipts and bills.
“Employees should know that if they incur extra expenses through working from home, which aren’t reimbursed by their employer, they should be able to claim a tax deduction for those costs,” Mr Chapman said.
However, an Australian Tax Office spokesman cautioned that only those expenses directly related to earning an income can be claimed.
“Expenses must also be portioned across all household users and can only claim their share,” he said.
“As an employee, generally you can’t claim a deduction for occupancy expenses such as rent, mortgage interest, property insurance, land taxes and rates when you work from home.
“An employee’s home office will not be a place of business if they are working there temporarily as a result of COVID-19.”
THE SAVINGS FROM WORKING FROM HOME DURING COVID-19:
* Car parking
* Public transport
* Take away coffees
* Work lunches
* Dinners with friends or family
* Afterwork drinks or social drinking
WHAT CAN BE CLAIMED ON TAX:
* A share of heating, cooling and lighting bills
* Costs of cleaning your home working area
* Depreciation of home office furniture and fittings
* Depreciation of office equipment and computers
* Costs of repairing home office equipment, furniture and furnishings
* Items such furniture and computer equipment costing less than $300 can be written off in full immediately.
* Computer consumables including ink and paper.
* Phone and internet expenses
(Source: H&R Block)
KEY RULES FOR A DEDUCTIBLE EXPENSE:
* You must have paid for it yourself
* It must not have been reimbursed by your employer or anyone else
* Where sharing the expense with others, you may only claim your share
* It must be directly related to earning your income and not a personal expense
* You must have a record to prove your claim.