What Percentage can I claim?
It’s a common question we often receive from clients seeking to claim their mobile phone or home internet. It’s also one of the key areas the ATO are focusing on this year.
A variation to the question is also, “Is there a minimum percentage that I can claim that will be okay with the ATO? “
The short answer is that there is no minimum percentage. Even claiming just 5% of your mobile phone bill won’t be allowed if you cannot demonstrate how you arrived at the 5%.
So let’s take mobile phone expenses for example.
What would you need to retain and do in order to justify your mobile phone claim?
Firstly, collate and have on file, all your phone bills for the financial year. That will give you the total you spent. Let’s say it was $ 1000 for the year.
Then in order to determine your work related percentage, you need to itemise one month’s worth of outgoing calls and clearly identify the work related ones. That one month should be representative of a normal work month.
So if in that month, you identified a sum of $ 60 in work related calls, out of a total of $ 180 of total monthly calls, that suggests a 30% work related percentage..
So as you can see, it’s not a matter of simply saying “it’s around 30%”. You need to substantiate your claim as above.
Home internet works in a similar way. However it can prove to be a lot more tedious due to:
- Phone bundles where the internet portion of your bill is not separately identified.
- Multiple people at home using the internet as well (i.e. your partner, children etc.).
So assuming you can determine the internet portion is $ 60 per month, that’s $ 720 per annum.
Now if you live alone, it’s a bit easier in that you are more than likely the only one using the internet. Assuming your data usage is not itemised on you bill, your next step is to keep a diary for one month’s typical usage whereby you record:
- the total time spent on the internet for all use (say 60 hours)
- the work related time spent on the internet (say 24 hours)
In the above example, the work related percentage is 40% (24/60). The claim is hence $ 720 * 40% = $ 288
If you have other members on the house hold, then the process is similar, but you will be recording the TOTAL hours the internet was used in that month by all concerned, and then comparing with your usage.
So following on from the example above, let’s assume the total usage was 240 hours. Your usage remains at 24 hours. Hence your percentage is now 10% (24/240. Your claim is now 10% of $ 720, which is $ 72 in total for the year.
The above may sound very tedious and we would agree with you. Unfortunately that’s the manner in which you would need to substantiate your claim.