COVID-19 support measures have ended and the rules below applied only at the time each update was published – always check the ATO for the current position, or speak to the pmwPlus team. We have consolidated our COVID-19 era guidance into this single archive for reference.
What is the JobKeeper Alternative Test?
Archived April 2020 post. JobKeeper has since ended; this is kept for reference only. At the time, if your business didn’t meet the basic decline-in-turnover test for JobKeeper, the ATO’s alternative decline-in-turnover test could apply. We summarised the rules here.
The alternative test applied only when an entity failed the basic test, and it involved a number of complex rules. The ATO divided it to reflect seven different business situations (each with sub-sections). The best starting point was to determine whether your situation reflected one or more of the following.
The seven situations
1. Business commenced: your entity started business before 1 March 2020 but after the relevant comparison period (with two alternatives under this section). 2. Business acquisition or disposal that changed turnover, occurring after the comparison period and before the applicable turnover test period. 3. Business restructure that changed turnover, in the same window. 4. Substantial increase in turnover immediately before the test period – 50% or more over 12 months, 25% or more over six months, or 12.5% or more over three months.
5. Business affected by drought or natural disaster: the entity operated in a declared drought or natural disaster zone during the comparison period and this changed its turnover. 6. Irregular turnover: over the 12 months before the test period, the lowest turnover quarter was no more than 50% of the highest, and turnover was not cyclical. 7. Sole trader or small partnership with sickness, injury or leave: the entity had no employees, and the sole trader or a partner did not work for all or part of the comparison period due to sickness, injury or leave, affecting turnover.
Getting help
The full detail sat on the ATO website. If you were unsure which situation applied, the advice was to get in touch with the team – the rules were intricate and the right test depended on your specific circumstances.
What home office expenses can I claim while working from home?
Archived April 2020 post. The temporary 80 cents-per-hour shortcut method described below applied to specific COVID-19 periods and has since been replaced – always check the ATO for the current working-from-home rules. If you work part or all of your job from home, you may be able to claim a deduction for the running costs of your home office.
The temporary shortcut method
Following the outbreak of coronavirus, the ATO announced arrangements to make it easier to claim. The temporary shortcut let people claim 80 cents per hour for all running expenses, rather than calculating specific costs, and removed the requirement to have a dedicated work area – so, for example, a couple both working from home could each claim the rate. It didn’t prevent people from claiming under the existing methods instead, and it couldn’t be used for periods before 1 March 2020.
Three ways to calculate (1 March to 30 June)
There were three options for that period: (1) claim 80 cents per work hour for all additional running expenses; (2) claim 52 cents per hour for heating, cooling, lighting, cleaning and the decline in value of office furniture, plus the work-related portion of phone, internet, consumables, stationery and the decline in value of your device; or (3) claim the actual work-related portion of all running expenses, calculated on a reasonable basis. The ATO’s three golden rules still applied: you must have spent the money and not been reimbursed, it must relate directly to earning your income, and you must keep records to prove it.
Running expenses and record-keeping
Under the existing approach, a deduction could be claimed for home office running expenses such as electricity, gas and depreciation of office furniture, at actual cost or 52 cents per hour. As with a motor vehicle claim, a four-week diary or logbook was recommended to establish your pattern of working from home. No deduction applied where no additional costs were incurred (for example, working in a room where others are watching TV).
Phone, internet and equipment
You could claim the work-related portion of phone and internet costs, with a representative four-week period accepted as establishing your pattern of use for the year. Depreciation on equipment used partly for work – furniture, computers, printers, scanners, modems – could be apportioned based on a four-week diary record of income-producing versus private use.
Occupancy expenses
Occupancy expenses (rent, mortgage interest, water rates, repairs, house insurance) could be claimed only if the home was genuinely used as a place of business, apportioned on a floor-area basis. Factors indicating a place of business include an area clearly identifiable as such, not readily suitable for private use, used exclusively or almost exclusively for the business, and used regularly for client visits. If you work from home merely as a matter of convenience you can’t claim occupancy expenses, and it’s rare for an employee to be able to. Note that claiming occupancy expenses may affect your main-residence capital gains tax exemption if you later sell. For assistance, contact pmwPlus.
COVID-19 business update – March 2021
An archived update from March 2021. If your business was struggling with cash flow at the time, it was a good moment to take stock – COVID-19 tended to magnify and accelerate underlying issues.
JobKeeper ends soon
The final JobKeeper payment was processed in April 2021. Businesses already receiving payments didn’t need to do anything when the program closed, but had to complete their final monthly business declaration for March by 14 April 2021. Businesses needing further help could look at the JobMaker Hiring Credit.
Claiming the JobMaker Hiring Credit
The JobMaker Hiring Credit was available for eligible employers who created new positions for eligible young people between 7 October 2020 and 6 October 2021. No fall-in-turnover test was required – employers registered via ATO online services, nominated eligible additional employees through Single Touch Payroll, and claimed payments.
Reviewing fringe benefits
The FBT year ends on 31 March, so it was time to review benefits provided to employees and work out which attracted FBT – private use of work cars, entertainment, expense reimbursements and salary sacrifice arrangements. Some COVID-related benefits (equipment to work from home, emergency accommodation, food, transport and health care) were generally exempt.
Contact us if you have any questions or want to discuss the next steps for your business.