Claiming mobile phone, internet and home phone expenses

How to claim your work-related telephone expenses.

Did you know if you own a phone or pay for internet for work-related purposes, you may be able to claim a tax deduction?

If you use your own phones or internet for work purposes, you may be able to claim a deduction if you paid for these costs and have records to support your claims.

When you can claim

Claiming is simple.

If you are claiming less than $50 for incidental calls, then the ATO accepts the following amounts for claiming:

  • $0.25 for work calls made from your landline
  • $0.75 for work calls made from your mobile
  • $0.10 for text messages sent from your mobile.

If you are claiming more than $50 then you need to keep records for a four-week representative period in each income year to substantiate your work-related use.

For example you may use diary entries or detailed bills to show the number of calls or text messages that are work-related.

Having evidence from your employer that shows an expectation to make work-related calls on your own phone will definitely help justify the deduction.

As there are many different types of plans available you will need to determine your work use using a reasonable basis.

Itemised Bills

If you receive a phone bill that individually itemises your phone calls, then you need to determine your work-related percentage over the four-week snapshot period.

Example: Phone calls are itemised on your bill

Julie has an $80 per month mobile phone plan, which includes $500 worth of calls and 1.5GB of data. She receives a bill which itemises all of her phone calls and provides her with her monthly data use.

Over a four-week representative period Julie identifies that 20% of her calls are work-related. She worked for 11 months during the income year, having had one month of leave. Julie can claim a deduction of $176 in her tax return (20% × $80 × 11 months).

Usage is not itemised on your bills

Most phone plans now include unlimited phone calls and often don’t include an itemised bill of costs. Therefore you must determine your work use by keeping a record of all your calls over the four-week snapshot period and then make a claim that is reasonable.

Example of claiming without an itemised bill:

Ahmed has a prepaid mobile phone plan which costs him $50 per month. Ahmed does not receive a monthly bill so he keeps a record of his calls for a four-week representative period. During this four-week period Ahmed makes 25 work calls and 75 private calls. Ahmed worked for 11 months during the income year, having had one month of leave.

Ahmed calculates his work use as 25% (25 work calls ÷ 100 total calls). He claims a deduction of $138 in his tax return (25% × $50 × 11 months).

Bundled phone and internet plans

Things are a little more complicated with bundled services. Often phone and internet services are bundled together making it impossible to separate the individual costs.

The ATO accepts that when claiming deduction for work-related use of one or more services, you need to split the cost based on your work-related use for each service. When there is no clear breakdown of the cost of each service, it is reasonable for to allocate an equal share of the total cost to each service.

Once again you need to identify the work-related use for each service using the four-week snapshot method. This gives you a pattern of use which can then be applied to the full year.

For example:

Michael has a $100 per month home phone and internet bundle, which includes unlimited internet use. As there is no clear split for the cost of each service it is reasonable for Michael to allocate 50% of the total cost to each service.

Over the four-week snapshot Michael determines that 25% of his call are for work purposes and he uses 30% of the internet data for work.

He would be entitled to claim:

$100 x 50% x 25% = $12.50 x 12 months = $150

$100 x 50% x 30% = $15.00 x 12 months = $180

Should you require any further information please don’t hesitate to contact our office.

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