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Key Takeaways
- You can claim the work-related portion of your personal phone costs, including calls, texts and data.
- You can only claim work-related use, and you need records to show how you calculated your claim.
- If you use the 70c fixed rate method for working-from-home expenses, your phone costs are already included.
- If your claim is small, the ATO allows a simple per-call and per-text method.
- Bundled phone and internet plans need to be split before you calculate your work-related percentage.
Do you use your mobile phone for work? If so, you may be able to claim a portion of your mobile phone expenses on your tax return.
If you claim your work from home expenses using the 70c fixed rate method, you cannot claim your mobile phone separately. Instead, you can claim actual expenses separately by using the actual cost method.
What counts as a work-related phone expense?
The ATO allows you to claim a deduction for the work-related portion of any expense you incur using your personal mobile phone for work. Common examples include:
- Phone calls
- Video calls
- Text messages
- Emails
- Logging in to systems
- Software testing
- Online research
- Tracking
It’s not just work-related phone calls that cost you money, it’s everything else too! That’s why it’s worth getting all your eligible phone expenses back each year.
How does the ATO want you to work out your phone claim?
Claiming your phone expenses is not as simple as just uploading your monthly mobile phone bill and entering the total amount in your return. The ATO knows you also use your phone personally. So how do you claim work-related phone expenses the right way?
You can only claim the portion of your phone use that is work related. You’ll need to work out what that percentage is, and you’ll need to keep records of those costs.
Can I include the cost of buying my phone in my phone expenses?
If you purchased a phone outright and use it partly for work, you can claim a percentage of the purchase price. If the phone cost less than $300, you can claim the work-related percentage as a one-off tax deduction. Or, if it was above $300, you claim the depreciation over its lifespan, which the ATO states is three years from date of purchase. (Don’t worry about calculating this yourself! One of our expert accountants can calculate it for you).
What are the ways to claim phone expenses on your tax return?
- Calculate from a mobile phone plan.
- Claim work-related calls only.
- Claim costs from a bundled phone and internet plan.
1. How do I calculate my expenses from a mobile phone plan?
If you have a mobile phone plan, you can claim the work-related portion of your phone use. Here’s how to do it for both itemised and non-itemised bills.
Itemised bills:
Work out the amount to claim by:
- Recording the number of work calls and the time spent on work calls.
- Recording the amount of data downloaded for work purposes.
Example: Ann is on an $80 per month phone plan that includes unlimited calls and 15GB of data. Her bill itemises her phone calls and her monthly data use.
Ann checks her phone bill and works out that work-related calls make up 20%. She also estimates her phone data use to be 20% as she often checks and responds to emails on her phone. Therefore, she calculates the following:
20% (business use) × $80 (total bill) × 11 months (she had 1 month leave) = $176. Therefore, she can claim $176 in phone expenses on her tax return.
Non itemised bills
If your bill is not itemised, keep a diary for one month with all your phone expenses. Etax provides a handy phone diary you can use here.
Example: David’s monthly phone bill is $50. Over a typical month, David works out that 25% of his phone use is work-related (25 work calls ÷ 100 total calls). After taking a month of leave across the year, David calculates 25% × $50 × 11 months = $138, which he can claim as a phone expense on his tax return this year.
2. Just need to claim a few incidental work-related calls?
If your claim is less than $50 in total, you calculate the expenses at a nominal rate:
- $0.75 for work calls made from your mobile
- $0.10 for text messages sent from your mobile.
For claims over $50, the easiest way to work out how to claim work-related mobile phone expenses is by the method we describe above. Choose a typical four-week period and record your work-related use. Then, apply that percentage to the whole year.
3. Need to calculate work-related costs from a phone and internet plan bundle?
It is common for households to have their phone and internet services bundled. If you need to claim expenses for work-related use of your phone and internet, you need to figure out your costs based on your work use for each. (Special note: If you share the cost of the bills with someone else in your household, you claim only your share of the bill, not the total amount).
Example: Carol lives by herself and has a $150 per month mobile phone and internet bundle. The bill shows that the monthly cost of the phone service in her bundle is $65, and her internet service is $85.
Now that Carol has the value of each bundled component, she then calculates her work-related use for each item:
- Carol’s mobile phone use: 20% work-related use × $65 per month × 11 months (as she had a month of leave) = $143
- Home internet use: 50% work-related use × $85 per month × 11 months (as she had a month of leave) = $467.50
In her tax return, Carol claims a deduction of $610.50 for the financial year ($143 mobile phone use, plus $467.50 home internet use).
Frequently asked questions
You can only claim the work-related portion of your phone expenses. The ATO expects you to calculate what percentage of your phone use is for work and apply that to your total bill.
Yes. You need to keep records to support your claim. For itemised plans, your phone bill is your record. For non-itemised plans, the ATO allows you to keep a phone diary for a representative four-week period and apply that percentage to the full year.
You can only claim expenses you personally paid. If your employer reimburses you or pays part of your phone bill, you cannot claim that portion. Only the amount you paid out of pocket is claimable.
No. If you use the fixed rate method (also called the 70 cents per hour method) to claim working-from-home expenses, your phone is already included in that rate. You cannot claim it again separately. To claim phone expenses on top of other deductions, you need to use the actual cost method.
Yes, if you use the phone partly for work. If the phone cost less than $300, you can claim the work-related percentage as a one-off deduction. If it cost more than $300, you claim the depreciation over its effective life, which the ATO sets at three years from the date of purchase.
If you share a phone or internet plan, you must first apportion the bill to reflect your share of the total cost. Then apply your work-related percentage to that amount. You cannot claim the full bill, only the portion that is both yours and work-related.
If your total claim is less than $50, you can use the nominal rate method. This lets you claim 75 cents per work call and 10 cents per work text message, without needing to calculate a percentage of your bill.
Need some help claiming your work-related phone expenses?
Claiming work-related calls and phone expenses can be confusing, but don’t worry! Have a chat with one of our expert accountants when you’re doing your Etax tax return, they’re always happy to help you work out the right amount to claim.
