Are Standing Desks Tax Deductible In Australia? Claim Your Desk In 5 Steps
You may be able to deduct desk tax in Australia if working from home. Standing desks, including electric and manual standing desks, fall under office furniture tax deduction which is applicable if you’re employed and working from home. Strict criteria need to be met so that you can deduct tax for your desk if employed or running a business from home in Australia.
Key takeaways:
- You can claim a 100% tax deduction for your standing desk if it cost less than $300.
- You should not receive an employer allowance to cover value decline for office-related goods.
- You can only make a tax deduction claim if you’re standing desk is solely used for work purposes in a dedicated office space.
Can you claim standing desks on your tax return?
Standing desks fall under the category of home office furniture. Desks are part of a wider group of office-related goods and services you might claim a tax deduction for when working from home. These types of deductions are offered on very strict terms in Australia and they cover all running costs of a home office setup which involves higher home expenses as a result of working from home. This includes business phone costs, internet expenses, mobile phones, and other utility expenses that fall under capital expenses such as cleaning expenses.
Ready to buy? Best Australian standing desks for your home office.
How the ATO regards home office equipment
The Australian Taxation Office (ATO) sees home office equipment as a capital expense or a type of general expense that, in limited circumstances, can be tax deductible. Office equipment is tax deductible together with additional running expenses if
- You work from home and your employer cannot offer office space to work in.
- Your home office is only used for work purposes (i.e. a room that’s closed when not working).
- You use your own equipment (such as a standing desk) which you get a decline in value tax deduction compensation.
How much can you claim on your standing desk?
The exact amount of tax deduction you can get for your standing desk depends on the actual cost of the standing desk. The ATO offers a full tax deduction for office supplies that cost up to $300. This means you can get a full tax deduction on a desk that costs up to $300, irrespective of the size of your desk. Most standing desks, on the other hand, cost more than $300. You may be able to find a standing desk converter under $300 to claim a full cost tax deduction.
Alternatively, you may consider a classic desk under $300 when looking to claim a deduction for the full price of the desk or to entirely cover the actual costs of a desk. Equipment purchases such as home office desks fall under strict regulation and you have higher chances to claim tax deductions if you only use this new desk for work.
You can also use a standing desk or another desk that costs more than $300 and still get some tax deduction. Expenses related to desks are covered in smaller percentages as these desk decline in value. You can claim up to a 10% tax deduction if your standing desk costs more than $300.
All other working from home expenses for equipment purchases that are at least $300 each fall under this rule. You get a 10% tax deduction for desks, office chairs, laptops, printers, and other office supplies directly related to your job that cost more than $300. Small business owners can also claim this type of tax deduction. Both employers and small business owners are under a category of the eligible deduction for occupancy costs such as rent, mortgage interest, or the upkeep of the work related portion of the home.
When you can’t claim tax on your standing desk
When it comes to following expenses on standing desks, there are a few limitations you need to know as they may not make you eligible for directly related tax deductions.
- When your employer provided the standing desk for you. You can’t claim tax on your standing desk when your employer buys it for you when you work from home. Tax deductibility is only possible when you’re a sole trader, entrepreneur, or employee buying your own desk.
- When your standing desk is used by other family members. You need to be the only person using the desk and this needs to be for work along to get a tax deduction. The floor area of the desk and the office space you have at home is ideally shut in a dedicated offer room that to directly relate to tax deductions for your desk. You can’t get tax deductions when your standing desk sits in the living room, bedroom, or a corner of the house turned into a home office which would mean the desk is also used for leisure.
- When you sell the home with the desk in it. You need to pay capital gains tax when you sell the home. This includes the furniture and your standing desk. Full main residence exemption is not claimed in this case which means your capital gains tax is influenced by standing desks and other office supplies you may sell your home with.
Temporary full expensing of your standing desk
A temporary method of calculating working-from-home running costs known as the shortcut method is also offered by The ATO. This is a type of tax deduction on the an-hour method that offers a deduction of 80 cents per hour. You might still be able to claim a work-hour fixed rate method tax deduction for the previous year. The Shortcut Method has been in place from March 2020 to June 2022 to cover the growing needs of home office expenses and occupancy expenses during the COVID-19 pandemic.
Guide: How to claim your standing desk on tax returns
You can claim standing desk tax returns through your employer (if you’re an employee) or through your accountant (if you’re a small business owner). Here’s a short guide both categories can follow for eligible deductions on a standing desk.
Step 1 – Keep accurate records
All of the purchases you make in a financial year should be archived physically and possibly digitally if you pay for goods online. Private and business use expenses should be recorded separately. You can do this by saving all of the receipts such as the receipt of your standing desk. All other extras you buy for the desk such as cable management trays or keyboard trays which are purchased at a later date should also be archived by purchasing a receipt.
Step 2 – Choose the deduction method (according to your situation)
Australia offers 3 main methods for tax deduction when it comes to home office expenses, a category that includes standing desks.
Method A – The Actual cost method
The easiest way to claim tax deductions on your standing desk is by the actual cost method. This is based on the full cost of your standing desk. You can claim the full cost of your standing desk in the financial year it has been purchased. The same applies to phone and internet expenses or computer consumables which are also tax deductible. Actual cost tax deductions are possible for both desks under and over $300. However, you need to know that these deductions are offered on strict home office equipment regulations. You need to have a dedicated home office for your office equipment.
You cannot claim actual cost tax deductions for a standing desk your partner or children have access to. The tax is going to be deducted together with all of your expenses such as home office furniture, utilities, work-related phone bills, home internet, and other dedicated workspace costs you have at home when you file for your tax return at the end of the year.
Method B – Fixed rate
This fixed rate method was used for tax deductions on standing desks during the COVID-19 pandemic, up to July 2022 at a higher rate and now stands at 52 cents per hour. This tax deduction is calculated on a per-hour basis and it covers the decline in the value of home office buildings and furniture. Tax deductibility is going to be calculated according to the number of hours you work from home. This is a number you need to record.
It covers all work versus personal expenses such as home office furniture, utilities, new light fittings, computer consumables, computers, other types of office equipment, and even home occupancy expenses.
Method C – Shortcut (COVID-19) method
This is a method only used during the COVID-19 pandemic up to July 2022. It’s still accessible for the previous financial year and it resembles the fixed rate method but at a higher 80 cents per hour rate. Office furniture is included in this method of claiming home office expenses. A tax agent receives your application (from an employer or an accountant) when you claim deductions during your yearly tax returns.
Step 3 – Make an inventory list
A list of inventory is going to be accepted by an employer or an accountant on your behalf for tax deductions. All office furniture purchases should be archived with purchasing receipts here. Make sure you save all of your receipts as you may qualify for home expenses and claim a deduction on actual costs or a fixed rate method on your purchases.
Step 4 – Consider covering utility costs (plus other expenses incurred)
Utilities are also viable for tax return deductions. You may claim utilities under the fixed rate method which deducts 80 cents per hour when you log in your work hours into working from home expenses.
Step 5 – Use The ATO deductions app
Sole traders and businesses can automatize expenses with standing desks and claim tax even without the help of an accountant. The ATO app makes tax returns easier for all professionals. Make sure you download the app and register all of your expenses incurred with running a business from home. You can also log in to the hours you work from home here.
Frequently asked questions
You can get tax deductions of up to 100% when you purchase a desk that costs up to $300 in Australia. Tax deductions of up to 10% covering depreciation are offered yearly for standing desks that cost more than $300.
At the moment, there’s evidence to show up to $1 million was spent to encourage or to offer tax deductions to individuals and businesses buying standing desks in Australia. The government has even been involved in a study relating to standing desks which shows how sitting for a full day can be comparable to smoking in detrimental health effects. This is also a study that shows that the cost of the standing desk is currently the biggest obstacle for Australians who should stand more. Cost-effective measures such as standing during meetings or phone calls are recommended in this research.
Standing desks can be fully deductible when they cost less than $300. They are deductible in an amount of up to 10% when they cost more than $300. These deductions apply to businesses or professionals working in dedicated offices. Home office standing desk purchases are deductible ins similar amounts if the standing desk is solely used for work. This means no other family member should have access to it and that there’s an office room in the house where the desk is locked whenever you aren’t working.
All standing desk accessories are also tax deductible. Office furniture and even utilities can be tax deductible and are included in your yearly tax return.
Conclusion
You can claim at least 10% of your standing desk’s value in Australia. Standing desks are only partially subject to tax deductions are most cost more than the maximum limit of $300 for full office furniture tax deductions. Digital records of hours worked at the desk may also offer 80 cents per hour in a tax deduction for the pre-July-2022 period and 52 cents per hour in the period after July 2022.
