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  • Phone, data and internet expenses

    You can claim costs you incur when you use your own phone, data or internet for work-related purposes and have records to support your claims. You must meet all of the following conditions to claim a deduction:

    • you spent the money and your employer did not reimburse you
    • the expenses directly relate to earning your income
    • you have a record to prove it.

    You can't claim a deduction where you don't incur any expenses or for personal phone calls to family and friends. If you use your phone, data or internet for both work and private use, you will need to work out the amount that relates to your work use.

    On this page:

    If you are working from home as a result of COVID-19, we have specific information available about claiming home office expenses. This includes phone, data and internet expenses.

    See also:

    Phone expenses you can claim

    Where you have met all the conditions above, you can claim a deduction for:

    • your phone or device
    • data and internet expenses
    • phone plan or bundle plans.

    If the phone or device cost $300 or more you claim the decline in value of the item as a deduction over the effective life.

    Phone expenses you can’t claim

    You can't claim a deduction for installation and set up costs for phones, data and internet. This includes:

    Phones and devices your employer provides

    If your employer provides you with a phone for work use and they are billed for the usage (phone calls, text messages and data), then you can't claim a deduction. Similarly, if you pay for your usage and your employer then reimburses you, you can't claim a deduction.

    Costs you incur before you start work

    If you use your phone to seek employment you can't claim a deduction as you are not yet generating income from the use of the phone.

    Similarly, if you are a casual employee and an employer calls you to ask you to work, or you call them to check on work availability, you can't claim a deduction. The cost is not considered to be one that directly relates to your income-producing activities. Instead, it's an activity that is putting you in a position to earn that income.

    You can only claim a deduction for the portion of your phone use when:

    • you are earning assessable employment income
    • your employer requires you to use your phone in earning your income.

    For more information on costs that are private or capital in nature, are disallowed or that require you work out your usage, see the Employees guide for work expenses. Examples include installation costs, line rental and joint usage expenses.

    Records to prove your claim

    If your phone, data and internet use for work is incidental and you're not claiming more than $50 in total, you do not need to keep records.

    To claim a deduction of more than $50, you need to keep records to show your work-related use. Your records need to show a four-week representative period in each income year. You can then apply this representative period to the whole income year.

    Records you keep may include diary entries, including electronic records, and bills. Evidence that your employer expects you to work at home or make work-related calls from home will also help you show your entitlement to claim a deduction.

    See also:

    How to work out your work-related use

    As there are many different types of plans available, you will need to work out your work-related use on a reasonable basis as below:

    Incidental use

    If your work use is incidental and you are not claiming a deduction of more than $50 in total, you may make a claim based on the following, without having to analyse your bills:

    • $0.25 for work calls made from your landline
    • $0.75 for work calls made from your mobile
    • $0.10 for text messages sent from your mobile.

    Usage is itemised on your bills

    If you have a phone plan with an itemised bill, you need to work out your percentage of work use over a four-week representative period, which you can then apply to the full year.

    You need to work out the percentage using a reasonable basis. This could include the:

    • number of work calls made as a percentage of total calls
    • amount of time spent on work calls as a percentage of your total calls
    • amount of data downloaded for work purposes as a percentage of your total downloads.

    Example: Phone calls are itemised on your bill

    Julie has an $80 per month mobile phone plan, which includes $500 worth of calls and 1.5GB of data. She receives a bill that itemises her phone calls and provides her with her monthly data use.

    Over a four-week representative period, Julie identifies that 20% of her calls are work-related. She worked for 11 months during the income year, having had one month of leave. Julie can claim a deduction of $176 in her tax return (20% × $80 × 11 months).

    End of example

    Usage is not itemised on your bills

    If you have a phone plan where you don’t receive an itemised bill, you determine your work use by keeping a record of all your calls over a four-week representative period and then calculate your claim using a reasonable basis.

    Example: Non-itemised account

    Ahmed has a prepaid mobile phone plan that costs him $50 per month. Ahmed does not receive a monthly bill so he keeps a record of his calls for a four-week representative period.

    During this four-week period, Ahmed makes 25 work calls and 75 private calls. Ahmed worked for 11 months during the income year, having had one month of leave.

    Ahmed calculates his work use as 25% (25 work calls ÷ 100 total calls). He claims a deduction of $138 in his tax return (25% × $50 × 11 months).

    End of example

    Bundled phone and internet plans

    Phone and internet services are often bundled. If you are claiming deductions for work-related use of one or more services, you need to apportion your costs based on your work use for each service.

    If other members in your household also use the services, you need to take into account their use in your calculation.

    If you have a bundled plan, you need to identify your work use for each service over a four-week representative period during the income year. This will allow you to determine your pattern of work use, which you can then apply to the full year.

    A reasonable basis to work out your work-related use could include:

    • Internet  
      • the amount of data downloaded for work as a percentage of the total data downloaded by all members of your household
      • any additional costs incurred as a result of your work-related use, for example, if your work-related use results in you exceeding your monthly cap.
       
    • Phone  
      • the number of work calls made as a percentage of total calls
      • the amount of time spent on work calls as a percentage of your total calls
      • any additional costs incurred as a result of your work-related calls, for example, if your work-related use results in you exceeding your monthly cap.
       

    Example: Apportioning bundled services

    Sujita has a $100 per month home phone and internet bundle. The bill identifies that the monthly cost of Sujita’s phone service in her bundle is $40, and her internet service is $60. Sujita brings in her mobile phone plan of $90 per month and receives a $10 per month discount. Her total costs for all services are $180 per month.

    Sujita worked for 11 months during the income year, having had one month of leave.

    Based on her itemised accounts, Sujita determines that the work-related use of her mobile phone is 20%. Sujita also uses her home internet for work purposes and based on her use she determines that 10% of her use is for work. Sujita does not use her home phone for work calls.

    As the components are part of a bundle Sujita can calculate her work-related use as follows:

    Step 1 – work out the value of each bundled component

    • Mobile phone: $90 per month minus the $10 per month discount = $80 per month
    • Internet: $60 per month
    • Home phone: Sujita does not need to determine the home phone costs as she does not use this service for work purposes.

    Step 2 – apportion work-related use

    • Mobile phone use: 20% work-related use × $80 per month × 11 months = $176
    • Home internet use: 10% work-related use × $60 per month × 11 months = $66

    In her tax return, Sujita claims a deduction of $242 for the financial year ($176 mobile phone use + $66 home internet use).

    End of example

     

    Example: Apportioning bundled services

    Des has a $90 per month home phone and internet bundle, and unlimited internet use as part of his plan. There is no clear breakdown for the cost of each service. By keeping a record of the calls he makes over a four-week representative period, Des determines that 25% of his calls are for work purposes. Des also keeps a record for four weeks of the data downloaded and determines that 30% of the total amount used was for work.

    Des worked for 11 months during the income year, having had one month of leave.

    As there is no clear breakdown of the cost of each service (calls and downloads), it is reasonable for Des to allocate 50% of the total monthly cost to each service.

    Step 1 – work out the value of each bundled component

    • Internet: $45 per month ($90 ÷ two services)
    • Home phone: $45 per month ($90 ÷ two services)

    Step 2 – apportion work-related use

    • Internet: 30% work-related use × $45 per month × 11 months = $149
    • Home phone: 25% work related use × $45 per month × 11 months = $124

    In his tax return, Des claims a deduction of $273 ($149 + $124) for the year.

    End of example

    Buying a smartphone, tablet or other electronic device

    If you bought a smartphone, tablet or other electronic device and you use it for work you can claim a deduction for a percentage of its cost.

    See also:

    Last modified: 07 Jun 2021QC 46119