Recently, a client asked me if they could claim their hot desk expenses as a tax deduction, and it got me thinking—this is a question many of us remote workers and small business owners have!
What’s the Deal with Hot Desking?
Hot desking is like the casual dating of office setups—you show up, use a desk when you need it, and leave without any long-term commitment. It’s flexible, cost-effective, and perfect for freelancers, remote workers, and anyone tired of the traditional office grind. But can you actually claim your hot desk expenses on your tax return? Let’s break it down…
Can You Claim Hot Desk Costs?
The ATO lets you claim deductions for expenses that directly help you earn an income, and that includes the cost of renting office space—even hot desks! Here’s what you need to know:
1. It Must Be Work-Related
To claim your hot desk expenses, they need to be directly tied to your business activities. That means using the desk for meeting clients, working on projects, or managing your business—not just hanging out with a latte!
2. Keep Those Receipts!
Documentation is key. You’ll need receipts or invoices that show the cost and purpose of the hot desk.
3. Business vs. Personal Use
If you’re using the hot desk for both business and personal reasons, you’ll need to apportion the costs. For example, if you use the desk 70% of the time for business and 30% for personal stuff, you can only claim 70% of the cost.
How to Claim Your Hot Desk Expenses
Keep detailed records of all your hot desk costs—dates, reasons for use, and whether it’s business or personal. When tax time rolls around, these expenses will be included under “Other Work-Related Expenses” (for individuals) or “Rent” (for businesses).
Can You Claim Travel to Your Hot Desk?
The ATO usually considers travel between your home and work non-deductible because it’s seen as personal. There are exceptions to this as follows:
- Itinerant Work: If your job involves moving between various locations, like client sites and hot desks, you might be able to claim travel expenses.
- Travel Between Workplaces: If you’re heading straight from one work location to another (and not stopping at home), that travel could be deductible.
- Home Office as Your Main Base: If your main place of business is your home office and you travel to a hot desk for specific tasks or meetings, you may be able to claim that travel, especially if you have a dedicated home office setup.
Can You Claim Travel to Your Hot Desk?
Yes – provided you meet the criteria set by the ATO for each type of expense.
When working from home, you can claim deductions for expenses incurred as a result of working from home. The ATO provides two methods to calculate these expenses:
Fixed Rate Method:
You can claim a fixed rate per hour (67c in the 2024 FY) for additional running expenses, such as electricity, gas, and home office equipment depreciation. You need to keep a record of the actual number of hours you worked from home for the entire financial year and at least one record for each of the additional running expenses you incurred that the rate includes.
Actual Cost Method:
You can claim the actual additional expenses you incur when working from home, such as electricity, gas, cleaning, and the decline in value of home office furniture and equipment. You need to keep records of all expenses and show how you apportion work-related use for your expenses and depreciating assets.
Hot desk expenses can also be claimed as a tax deduction if they are directly related to earning your assessable income. To claim these expenses the expense must be directly related to your work activities, such as meeting clients, working on projects, or managing business operations.
Don’t Forget GST!
If you’re GST-registered, you can claim the GST portion of your hot desk expenses. Just make sure your invoices show the GST amount separately.
Wrapping Up
Hot desking can be a fabulous way to work flexibly while keeping overheads low, but understanding the tax rules is key to maximising your benefits. Keep good records, stay on top of apportioning business use, and make sure you claim those eligible costs to get the best possible tax outcome.
And as always, when in doubt, give us a shout.
