One question we’re often asked at tax time is “can I claim work-related calls made on my personal mobile phone, as a tax deduction?”
The answer is “yes!”
However, it’s important to do it the right way so you don’t get in trouble with the ATO down the track.
This post explains how you can legitimately claim a tax deduction for work-related calls made on your personal mobile phone.
A Quick Look At The Rules for Claiming Your Mobile as a Tax Deduction
A “personal” mobile phone is one that you pay to use – in other words, one where you pay the monthly phone bill or buy your own prepaid credit.
This is different to a “work” mobile phone, where the bill or plan is paid for by your employer.
Remember: you can only claim work-related calls on your personal mobile phone, not your work mobile phone.
How To Claim Work-Related Calls: The Easy Way to Calculate Work Usage
The easiest way to work out how to claim work related calls made on your personal mobile phone is to choose an “indicative” period, and apply it to the whole year.
Here’s how that works…
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
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.
If you earn $60,000, then in this example, you could get more than $70 back in your tax return! (To make calculating your deduction easier, check out the infographic at the bottom of this page.)
Tax Tips for Mobile Phone Use:
Remember To Keep Records
The ATO requires that you keep records outlining how you calculated tax deductions. So make sure you keep the monthly account statement and/or bill that you used to calculate your mobile phone deduction claim, and a record of your other bills to prove what you spent that year.
The easiest way to keep these records is to use the new Etax mobile app’s receipt saving function. To get started, download the Etax app on your phone today:
What About Mobile Data?
If you pay excess fees for data usage, unfortunately you cannot claim these excess fees on your tax return.
However, if your plan includes data and texts in an all-in-one monthly fee, there’s typically no way to separately calculate how much is work-related. Simply follow the steps described above for your total bill, and apply them to your regular bill.
We discussed this with some leading experts and they agreed, the ATO could require you to prove the percent usage if you tried to claim costs for data allowances or top-ups, so it’s recommended you avoid it because that could be a messy problem.
Instead, simply claim a percentage of your basic mobile bills, using the method above to calculate your percentage of work-related usage. Easy!
More Affordable Mobile Plans
If you do pay excess data fees, you may wonder what you can do to reduce your phone bill. Our tip: If you’re not locked into a contract, the time to change mobile plans is now!
Most Australians are moving toward low-cost, fixed-price mobile plans that includes data.In fact, many plans have unlimited calls and data for very affordable fees.
Why pay extra for data or SMS when you could use a popular plan that includes everything for one low price?