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Home » 2022/23 tax time: key changes for individuals

2022/23 tax time: key changes for individuals

Welcome to the 2022/23 tax time, where several major changes have been implemented for individuals. Here is a summary of the key changes that will apply this tax time.

Self-education expenses threshold removed

Until 2021/22, self-education expenses in excess of $250 were deductible. In other words, the allowable work-related self-education expense was calculated after reducing the expense by $250. The $250 non-deductible threshold has been removed for 2022–23.

Working from home

The COVID-19 hourly rate of 80 cents per hour, which is also called the “short cut method of working from home deduction”, can no longer be used from 2022/23.

There are two methods of deducting working from home expenses: fixed rate method and actual method.

Fixed rate method

The hourly rate and types of expenses covered by the hourly rate have been revised. A revised fixed rate of 67 cents per hour covers the below expenses:

  • data and internet
  • mobile and home phone usage
  • electricity and gas
  • computer consumables (e.g. printer ink)
  • stationery.

We are no longer required to have a dedicated home office to use this method.

While using fixed cost method we can claim deduction for below expenses on top of the hourly rate:

  • the decline in value of assets used while working from home, such as computers and office furniture
  • the repairs and maintenance of these assets
  • cleaning (only if you have a dedicated home office).

Actual cost method

The actual cost method allows us to claim deductions for all the above working from home expenses based on detailed calculations and records.

Eligibility criteria for using the actual cost method to claim actual expenses are as below:

  • we must incur additional running expenses as a result of working from home
  • we must keep records or other written evidence, which shows the amount:     
    • we spent on expenses
    • we spent on depreciating assets we buy and use while working from home
    • of work-related use for your expenses and depreciating assets.

Cleaning costs can be claimed only if there is a dedicated home office.

You can refer to below ATO link for further details on working form home deduction:

Working form home toolkit

https://www.ato.gov.au/Individuals/Income-deductions-offsets-and-records/Deductions-you-can-claim/Working-from-home-expenses/Actual-cost-method/

Low and middle income tax offset

The low and middle income tax offset (LMITO) has been removed from 1 July 2022. Because of this we may receive a lower refund than expected or a tax payable this year.

However, the low income tax offset (LITO) is still available for someone with a taxable income of $66,667 or less. It can provide a maximum offset of $700 depending on the taxable income.