Do you use your own mobile phone for work-related tasks? If you do, you may be able to claim a portion of your mobile phone expenses on your tax return.
Common work-related phone expenses include:
- Phone calls
- Video calls
- Text messages
- Logging in to systems
- Software testing
- Online research
So it’s not just work-related phone calls that cost you money when you use your personal mobile phone for work it’s data too so it’s work getting all of your phone expenses back in our pocket each you.
How to claim work-related phone calls and other phone expenses on your tax return
Claiming your phone expenses is not as simple as just uploading your monthly mobile phone bill to your tax return and entering the total amount in your tax return. The ATO know you also use your personal phone for personal use. So how do you claim work-related phone expenses the right way?
To start with, be very clear that you can only claim the work use percentage of your phone use. 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 that you use partly for work, you can claim a percentage of the purchase price. You’ll need a record of the purchase, of course. If the phone was below $300 you can claim a tax deduction for the business percentage of that amount as a one of tax deduction.
You claim the depreciation of the mobile phone over its lifespan, which the ATO states is two years from date of purchase.
What about a mobile phone plan?
If you lease the phone you can pay the work percentage of that lease amount and the same goes if you pay for a monthly plan. Keep a record of all your work data usage against your personal usage then claim the work percentage on your return.
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 $500 worth of calls and 1.5GB of data. Her bill itemises her phone calls and provides her with her monthly data use.
Ann works out that work-related phone calls make up 20%. So, after taking off the month of leave she took during the year, she establishes that 20% × $80 × 11 months = $176. She can claim $176 in phone expenses on her tax return.
Non itemised bills
If your bill is not itemised, just keep a record of your phone expenses that are work-related,
Example: Over a typical work month, David works out that 25% of his phone use is work-related (25 work calls ÷ 100 total calls). After taking off a month for leave across the year, David calculates 25% × $50 × 11 months = $138. David can claim that amount as phone expenses on his tax return this year.
Just need to claim work-related calls?
If you are claiming less than $50 in total, you can claim using the following basis:
- $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 calls made on your personal mobile phone is to choose a four-week period to record work-related use and apply that percentage to the whole year.
Here’s how to claim more than $50:
Choose a monthly account statement for a month where your work-related calls on your personal mobile phone were a typical example of your usual number of work-related calls. Then, complete the following steps:
- Count the total number of calls that you made (both work and personal)
- Count the number of calls that were work-related
- Calculate the percentage of work-related calls (divide the number of work calls by the total number of calls, and multiply the result by 100)
- Calculate the percentage of work-related calls in dollar terms against your total monthly bill.
- Multiply by 12 (months) to work out your yearly claim to add to your tax return
Example: If you made 60 phone calls during the month, and 24 of them were for work, then 40% of your phone calls were work-related. That means that you can claim 40% of your monthly phone bill each month of the year. So, if your monthly phone bill was $50, you can claim $20 per month multiplied by 12 months. In other words, you can claim $240 of work-related mobile phone expenses on your tax return.
Does the Short Cut Method of claiming home office expenses affect my phone expenses claim?
The short answer is YES! It’s important to know that if you worked at home between March 1 to June 30 2020 (the COVID-19 shutdown) and used the Shortcut Method to claim your home office expenses, all your phones expenses are included in that 80c per hour claim. You cannot claim your work-related calls as well.
Need some help claiming you work-related phone expenses?
Claiming work-related calls and phone expenses can be confusing. But don’t worry. Just have a chat with one of our accountants when you’re doing your Etax tax return, they’re always happy to help you work out the right amount to claim.