Phone, data and internet expenses
Claim costs you incur to use your phone, data or internet for work purposes and have records to support your claims.
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Conditions on claiming a deduction
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 if you don't incur any expenses or for the cost of 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.
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.
If you incur phone, data and internet expenses when working from home, the method you use to claim expenses may include these costs.
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.
You also can't claim a deduction if you're a casual employee and an employer phones you to ask you to work, or you phone them to check on work availability. This cost doesn't directly relate to your income-producing activities. It is instead, an activity that puts you in a position to earn income.
You can only claim a deduction for phone expenses you incur when carrying out your employment duties, that is, in the course of earning your employment income.
For costs that are private or capital in nature, are disallowed or that require you work out your usage, such as installation costs, line rental and joint usage expenses, see the Employees guide for work expenses.
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:
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 phone calls made as a percentage of total phone calls
- amount of time spent on work phone calls as a percentage of your total phone 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 $65 per month mobile phone plan, which includes $500 worth of phone 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 4 week representative period, Julie identifies that 20% of her phone 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 $143 in her tax return (20% × $65 × 11 months).
End of exampleUsage is not itemised on your bills
If you have a phone plan where you don’t receive an itemised bill, you work out your work use by:
- keeping a record of all your phone calls over a 4 week representative period
- calculating 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 phone calls for a four-week representative period.
During this four-week period, Ahmed makes 25 work phone calls and 75 private phone 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 phone calls). He claims a deduction of $138 in his tax return (25% × $50 × 11 months).
End of exampleInternet expenses
A reasonable basis to work out your work-related internet use could include:
- 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
- the time spent using the internet for work purposes as a percentage of the time spent by you for private purposes and by your family for any purpose.
Bundled phone and internet plans
Phone, internet and other related 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, before calculating your work-related use of each service, you need to identify the cost of each service covered by the plan. Bundled services can be apportioned:
- based on a supplier's breakdown of relative costs of the bundled services
- based on the relative costs of the bundled services as if they were purchased separately from the same supplier
- based on information on a comparable supplier.
Once you have identified the cost of each separate service in 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 work out your pattern of work use, which you can then apply to the full income year.
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 works out 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 works out that 10% of her use is for work. Sujita does not use her home phone for work phone 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 income 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 phone calls he makes over a 4 week representative period, Des works out that 25% of his phone calls are for work purposes. Des also keeps a record for 4 weeks of the data downloaded. He works out 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 (phone 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 ÷ 2 services)
- Home phone: $45 per month ($90 ÷ 2 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 exampleBuying 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:
- assets costing $300 or less, its full cost in the income year it was purchased
- assets costing more than $300, its decline in value over its effective life
If you use the asset for work purposes and private purposes, you need to apportion your deduction and only claim the work-related portion.
Keeping records for phone, data and internet
If your phone, data and internet use for work is incidental and you're claiming $50 or less in total, you don't need to keep records.
If the work use of your phone, data and internet is incidental, you can claim:
- $0.25 for work phone calls made from your landline
- $0.75 for work phone calls made from your mobile
- $0.10 for text messages sent from your mobile.
If the work use of your phone, data and internet is more than $50, you need to keep records:
- of your phone and internet bills for the year
- that show how much use is work-related.
Records you keep may include:
- diary entries, including electronic records
- bills for phone, data and internets services
- purchase receipts for phones and devices you buy
- evidence that you work at home or make work-related phone calls from home.
For more information on general record keeping requirements and formats, see Records you need to keep.
Claim costs you incur to use your phone, data or internet for work purposes and have records to support your claims.