Small business owners who have incurred expenditure on the following will receive a tax deduction:
- Cleaning of business premises due to contact tracing.
- Masks purchased for employees/customers.
- Hand sanitiser.
- Plastic/Glass shields
- Signage
- Costs incurred in setting up work from home for employees
- Costs incurred for setting up work from home for business owners (sole trader/partnership etc)
- PCR Tests if incurred during work related travel
- Employee Sick leave paid as a result of a positive COVID test. Check your Award for other entitlements
- Quarantine expenses – in very limited circumstances (not if the travel was part private part work)
- Rewarding staff for Vaccinations
If you’ve provided incentives or rewards to your employees for getting their COVID-19 vaccination or booster dose, it’s important to understand what your tax and super obligations are.
If you’ve provided your employees with a cash payment, you must:
- include the payment in your employee’s salary and wages
- withhold tax from the payment amount under pay as you go withholding
- include the amount in your employee’s ordinary time earnings. This is for the purpose of determining your super contributions for your employee.
If you’ve provided non-cash benefits, you may have to pay fringe benefits tax on them, unless an exemption applies.
If your insurance policy included ‘business interruption insurance’ and the policy allowed for closure due to COVID, the income received from business interruption insurance will be assessable income to your business (on the provision that you have claimed the deduction for the premium).
Employees who are working from home can claim:
Working from home expenses
- electricity expenses associated with heating, cooling and lighting the area from which you are working and running items you are using for work
- cleaning costs for a dedicated work area
- phone and internet expenses
- computer consumables, for example, printer paper, ink and stationery
- home office equipment, including computers, printers, phones, furniture and furnishings – you can claim either the
- full cost of items up to $300
- decline in value (depreciation) for items over $300.
Tracking and calculating all of the costs may prove challenging for some, alternatively you can use the short cut method. In short 80 cents per hour working from home. Maintaining records on how many hours worked is required. The shortcut method covers all your working from home expenses, such as:
- phone expenses
- internet expenses
- the decline in value of equipment and furniture
- electricity and gas for heating, cooling and lighting.
However, as you may need to use a different method to work out your working from home deduction in later years it’s important to keep the:
- receipts for depreciating assets or equipment you use when working from home
- records of how you calculated your work-related use of the asset
- your decline in value calculations.
Occupancy expenses relating to your home, such as rent, mortgage interest, property insurance and land taxes, will not become deductible merely because you are required to work from home due to COVID-19.