Claiming Your Mobile Phone as a Work-Related Deduction
25/01/2016 Abigail Lee, Accountant
Most people would know that you are able to claim your mobile phone expenses as a work-related deduction, however there is often confusion around how much can be claimed and how the claim can be supported. To help clear this up a little, here is what we do with your mobile phone expense claims at The Hopkins Group.
First of all to be able to claim work-related deductions the Australian Taxation Office (ATO) has a few requirements:
- You must have spent the money yourself and weren’t reimbursed
- It must be related to your job
- You must have a record to prove it (there are some exceptions to this rule)
When considering mobile phone expenses, we break claims down into two categories, split by how much you intend to claim.
Claiming under $50
If you use your phone for the odd phone call or text message, you can calculate your deduction using the following from the ATO:
- $0.75 for work calls made from mobile, and
- $0.10 for text messages sent from your mobile.
On occasion Jane uses her phone for work, making on average three calls and ten text messages a month. This works out to be:
3 calls x 11 months x $0.75 = $24.75
10 SMS x 11 months x $0.10 = $11.00
Overall Jane can claim a deduction of $35.75
Why 11 months? The ATO makes the assumption that Jane has taken the four weeks annual leave allocated to her during her working year, bringing 12 months down to 11.
Claiming above $50
For those that use their phone more regularly, you are required to keep a record of all work-related calls and messages. To work out how much you can claim, the easiest option is to identify on an itemised bill the percentage of work-related calls made from your phone or the percentage of time the phone is used for work purposes.
Bob is on a $70 per month phone plan. To claim some of this cost, he goes through one of his bills and determines that 60% of his calls are work-related.
Bob is able to claim:
$70 x 11 months = $770
$770 x 60% = $462
If you don’t receive an itemised phone bill, don’t despair — it is still possible to claim your phone expenses. To do so, you will be required to keep a log book of your calls for a four week period, showing all calls made and the nature of each call.
Phoebe uses a prepaid mobile, which costs her $40 each month. Phoebe keeps a record over four weeks of all her calls and calculates that 30% of her calls are work related.
Therefore, Phoebe can claim:
$40 x 11 months = $440
$440 x 30% = $132
Substantiation of claims has been a focus of our accounting team, as we work with clients to ensure that we ask the right questions and that you have the right information on file for your claims. As a general rule any deductions you intend to claim need to have supporting documents, except for those under $50. These documents need to be kept for up to five years.
If you have questions about claiming work-related deductions such as mobile phone usage, please don’t hesitate to contact The Hopkins Group Accounting Team.
Abigail Lee is an accountant with The Hopkins Group (John Hopkins Accounting Pty Ltd). This blog post contains general advice only, which has been prepared without taking into account the objectives, financial situation or needs of any person. You should, therefore, consider the appropriateness of the information in light of your own objectives, financial situation or needs.
Get schooled on self-education deductions
17/05/2018 Bobbie Adams, Senior Accountant
Looking to up your professional development education game? You might be able to claim these expenses at tax time!
Deep dive into the Federal Budget with The Hopkins Group
09/05/2018 The Hopkins Group
We dipped our toes in the water of the Federal Budget last night, but now that the seas have settled, we’re ready to deep dive into the proposals and translate what it means for you.
Changes to GST on property transactions
06/04/2018 Rachel Williams, Director of Accounting
Thinking about property development? Our Director of Accounting breaks down the importance of considering GST and tax obligations from the outset.