Computers and laptops are generally depreciating assets which decline in value over the time you use them.
If when you buy a computer, if it includes software as part of the purchase price, you don't need to break up the costs to calculate the decline in value. However, if you buy additional software, or it is sold separately you may need to calculate its decline in value.
To claim a deduction for computers and laptops and software expenses:
- You must incur the cost and use the item to perform your work duties.
- You must work out if you can claim the cost of the item in the income year you buy it or the decline in value over its effective life.
- You must have a record of your expenses and use of the item.
When you use the items for both private and work purposes, you need to apportion your deduction. You can only claim the work-related use of the item as a deduction.
You can also claim the work-related portion of:
- costs you incur to repair and insure these items
- interest expenses you incur on money you borrow to buy these items.
What you can't claim
You can't claim:
- your use of computers, laptops or software for private purposes
- expenses for computers or laptops where someone else supplies the item for your use.
You can claim the cost of a device you buy and use for work, such as a:
- desktop computer or personal computer (PC)
You can also claim the cost of peripherals such as a mouse, keyboard, docking station or cables (if you buy these separately).
You can claim the cost of associated computer software or programs that you use for work, such as:
- physical CDs or apps you buy for your device
- anti-virus and anti-spyware software
- virtual private networks (VPN).
How you treat and work out your deduction will depend on if it cost:
You need to apportion expenses if you use the computer for both work and private purposes.
You claim the deduction in your tax return as other work-related expenses. For instructions on how to complete your tax return, see Lodgment options for preparing your tax return.
An immediate deduction is available for items that cost $300 or less, if you use them more than 50% of the time for a work purpose. You must satisfy the conditions of 4 tests to claim an immediate deduction.
Example: separate decline in value calculation for the cost of software
Mateo works from home 2 days a week. He buys a computer which comes with the operating system already installed ($999). Mateo only uses the computer when working from home.
He also separately buys an annual subscription for antivirus ($149) and software that he needs for his work ($450).
As the cost is more than $300, Mateo can claim a deduction for the decline in value of both:
- the computer and operating system
- the software.
He can also claim an immediate deduction for the anti-virus software as it is under $300 and only used for a work-related purpose.End of example
Work out your claim for the decline in value for a depreciating asset, using our Depreciation and capital allowances tool.
You can manually calculate the decline in value of a depreciating asset using either the prime cost method or diminishing value method.
You must keep records to support your claim for work use of computers, laptops and software, such as:
- receipts for items you buy
- evidence that you need to use the item for work purposes
- a diary or similar record that shows how you work out your percentage of work-related use.
If you are claiming the decline in value of an asset over its effective life, you also need to keep records that show how you calculated decline in value.
For more information on general record keeping requirements and formats, see records you need to keep.Deductions for computers, laptops and software you use for work, including the cost of repairs.