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  • myGovID expenses

    You may be able to claim a deduction for expenses you incur to use myGovID on a smartphone, device or the data you use to carry out your employment duties.

    The myGovID app allows users to use their digital identity to authenticate with Australian Government websites and services.

    You can only claim a deduction for your work-related use. You need to work out the amount you use your smartphone, device or data for work purposes.

    On this page:

    You provide the phone

    If you provide the smartphone or device and use it mainly to produce your employment income, you can claim:

    • an immediate deduction if it cost $300 or less
    • a deduction for the decline in value of its cost over its effective life, if it cost more than $300.

    Smartphones and devices start to decline in value from when you first use them for any purpose.

    You may be able to claim a deduction for the decline in value of a smartphone or device you own, that you first bought for a private purpose. You must meet both of the following conditions:

    • the smartphone or device cost $300 or more
    • you use it at a later time for a work purpose (such as accessing our online services).

    Example 1: Employee purchases a smartphone for less than $300

    Gerry is an in-house accountant for a company. His duties involve lodging his employer’s income tax returns and business activity statements. Gerry also requires access to ATO online services so that he can view statements of account and Single Touch Payroll reports.

    Gerry purchases a smartphone for $199 to use only at work for the purpose of setting up a myGovID to access the ATO online services. Gerry’s employer provides him with authorisation to access ATO online services through the Relationship Authorisation Manager and access to the company internet via wi-fi. Gerry leaves the smartphone at work.

    As the device cost less than $300, Gerry can claim an immediate deduction for the full amount he incurred to purchase the phone ($199) in the income year he purchased it in.

    Gerry can't claim a deduction for data because the company has provided Gerry access to their internet. Therefore, Gerry doesn't incur any expense for the data he uses.

    End of example

     

    Example 2: Employee uses existing smartphone – apportioned personal and work use

    Eliza works in the payroll department of a large company. Her duties involve calculating the pay for employees and ensuring that her employer meets their Superannuation guarantee obligations. In order to carry out these duties, Eliza requires a myGovID to access ATO online services on behalf of her employer.

    Eliza purchased her smartphone on 1 July 2020 for $1,100. Eliza uses her smartphone for private and making and receiving work-related calls. On 29 February 2021, she uses it to set up myGovID and her employer gives her authorisation to access ATO online services through the Relationship Authorisation Manager.

    As Eliza has been using her smartphone for both private and work purposes during the income year, she has kept itemised accounts and diary records representing a four week period. Eliza's records prior to using her smartphone to access ATO online services, show that up until 29 February 2021 when she registered for myGovID, she used her smartphone 40% for work purposes.

    From 1 March 2021 when she started using her myGovID for work purposes, Eliza found that her use of the smartphone increased to 50% for work purposes. She works this out by looking at the increase in data used from that date.

    As Eliza is on a $50 per month bring your own phone plan, she can claim a deduction for 40% of her monthly plan rate from 1 July 2020 to 29 February 2021. Eliza took four weeks leave during this period so she excludes the four weeks from her calculation for that period.

    Eliza can also claim a deduction for 50% of her monthly plan for the period from 1 March 2021 to 30 June 2021.

    Her deduction of $240 for her monthly plan is calculated as follows:

    • ($50 × 7 months) × 40% = $140
    • ($50 × 4 months) × 50% = $100
    • $140 + $100 = $240

    Eliza can also claim a deduction for the decline in value of her phone ($1,100). She decides to use the diminishing value method and calculates the decline in value using the following formula:

    • base value × (days held ÷ 365) × (200% ÷ asset's effective life)
    • $1,100 × (365 ÷ 365) × (200% ÷ 3 years) = $734
    • ($734 × 7 ÷ 12 months) × 40% = $172
    • ($734 × 4 ÷ 12 months) × 50% = $123
    • $172 + $123 = $295

    In her return for the 2020-21 income year, Eliza can claim a total deduction for her phone expenses of $535 ($240 + $295).

    End of example

    See also:

    Your employer provides the phone

    You can't claim a deduction if your employer either:

    • provides you with a smartphone or device to obtain and use a myGovID and pays for any associated data
    • reimburses you for costs you incur to buy a smartphone or device and the associated data.

    Example 3: Employer provides smartphone to employee

    Leo works for an accounting firm. He prepares accounts, lodges income tax returns and lodges business activity statements for clients.

    On 29 February 2021, his employer gives him authorisation to access ATO online services through the Relationship Authorisation Manager. In order to set up a myGovID and access online services, his employer provides him with a mobile phone to use at work. Leo uses his employer’s wi-fi to access the online services.

    As Leo doesn't incur any expenses for the smartphone or data he uses, he can't claim deduction for its use. However, his employer will be entitled to claim a deduction for the cost of supplying the smartphone and data to Leo for this purpose.

    End of example

    You receive an allowance from your employer

    If you receive an allowance to cover the cost of a smartphone, device or data for the purpose of obtaining and using myGovID to access our online services, you must include the allowance as income in your tax return. You can claim a deduction for the smartphone or device you buy and the amount you spent on data for this purpose. You can claim the:

    • immediate cost if the amount of the smartphone or device is $300 or less
    • decline in value where the cost of the smartphone or device is more than $300.

    Example 4: Employer pays employee an allowance to purchase a smartphone

    Priya is an employee tax agent and BAS agent. Priya requires access to ATO online services in order to carry out her employment duties. Priya sets up a myGovID and her employer gives her authorisation to access ATO online services through the Relationship Authorisation Manager.

    In the 2020–21 income year, Priya’s employer pays her an allowance of $500 to cover the cost of buying a smartphone or device and any data she requires to set up and use a myGovID to access online services.

    On 1 March 2021, Priya buys a smartphone at a cost of $299 and enters into a contract for a plan at a cost of $30 per month. Priya chooses the plan on the basis that it includes enough data for her to regularly access online services. The phone Priya buys is only used for work purposes as she already has a smartphone that she uses for private purposes.

    In her tax return for the 2020–21 income year, Priya declares the allowance of $500 from her employer as income and claims a deduction of $419 calculated as:

    ($299 + ($30 × 4 months)) = $419

    End of example

    See also:

    Records for phone and data expenses

    You must have records to support your claim for phone and data expenses.

    These records may include diary entries, including electronic records, and bills. Evidence that you are required to use myGovID to access online services for work purposes will also help you show that you are entitled to a deduction.

    See also:

    Last modified: 07 Jun 2021QC 61932