Home-office equipment and the $300 rule for office workers

Plenty of office, admin, finance and HR staff have quietly built their own home setup. The employer sends a laptop, and everything around it comes out of your own pocket: a desk that fits the spare room, a chair that holds up through back-to-back meetings, a second monitor so you are not squinting at a spreadsheet all afternoon. If you paid for it and you use it for work, the work-use portion of what you spent is deductible. What changes from item to item is not whether you can claim it, but when: all at once this year, or a little each year across its life.

The setup you pay for yourself

Think about what sits on and around your desk at home. A desk, a chair, a monitor, and often a laptop, a keyboard, a mouse, a headset for calls, a docking station, a desk lamp. When your job involves working from home some or all of the week and you bought that gear yourself, each piece is a deduction for the share you use for work. The gear does not have to be fancy or expensive to count. It has to be something you paid for and genuinely use to do the job, with the receipts to show it.

The $300 line

One number sorts every purchase into one of two piles. An item that cost $300 or less, and that you use mainly for work, is deductible in full at its work-use share in the same income year you buy it. A $180 keyboard, a $120 headset, a $90 desk lamp: each of those is claimed at its work-use share this year, no spreading required. An item that cost more than $300 is claimed as decline in value instead. Its cost is written down over the effective life the ATO sets for that kind of asset, a portion each year rather than the lot in one go. So a $900 sit-stand desk or a $1,400 laptop is not a single-year deduction. You claim a slice of it this year, another next year, and so on across the years the asset is expected to last.

You cannot split a set to beat the line

The $300 test looks at the item, so it is fair to ask whether you can keep purchases under the line by buying in pieces. You cannot. Where things form a set, or are identical or substantially identical and together cost more than $300, the ATO treats them as one asset and depreciates the combined cost. Buy two matching monitors at $250 each on the same setup and you have spent $500 on a substantially identical pair, so they are handled together and written down over their effective life rather than claimed in full as two sub-$300 items. The line is real, but it is drawn around what you actually bought, not around how many receipts you split it into.

Only the work-use share

Most home gear does double duty. The monitor you build reports on is the same one the household streams on at night, and the desk holds personal paperwork as well as work. So you claim only the work-use percentage, worked out on a fair and reasonable basis, whether the item is claimed in full this year or written down over years. If you bought it partway through the year, apportion for the part of the year you owned it as well. A chair you bought in April and used 80% for work is claimed on that 80%, and only from April, not for the whole twelve months. Keep a note of how you reached the percentage, since the reasonableness of that apportionment is what the ATO looks at first if it reviews an equipment claim.

The part that surprises people

Here is the point that catches hybrid workers off guard. If you use the fixed-rate method for working from home, the cents-per-hour rate already covers your running costs, and you have read in the working-from-home chapter that claiming phone, internet or electricity again on top of it is double-dipping. The decline in value of your desk, chair, monitor and other equipment is the exception. That depreciation sits outside the fixed rate and is claimed separately, on top of the hourly amount. So a hybrid office worker claims the hourly rate for the running costs of working at home, and then separately claims the decline in value of the furniture and equipment. The two do not overlap, and leaving the equipment out is money left on the table.

Two methods for decline in value

For anything over $300, there are two ways to work out the yearly slice. Prime cost spreads the deduction evenly, the same amount each year across the asset's effective life. Diminishing value front-loads it: a larger deduction in the early years and less later on, as the written-down value shrinks. Neither is more correct than the other, and the right pick depends on whether you would rather claim more sooner or keep it even. The one thing to know is that once you choose a method for a particular asset, that choice is locked for that asset. Decide it when the item first goes on the return, not later.

Repairs, and gear that is not yours to claim

If a piece of work equipment needs fixing, the repair is deductible for its work-use share, separately from how you claimed the item in the first place. What you cannot claim is gear that was never yours. Anything your employer supplies or reimburses in full is theirs, not a cost you carried, so it does not go on your return. That includes decline in value: you cannot depreciate a laptop or phone the employer provided, because you did not pay for it. The test throughout is simple. You claim what you paid for and use for work. You do not claim what someone else paid for.

The bottom line

The rule reduces to one figure per item. At $300 or less, and mainly for work, you claim the work-use share in full this income year. Above that, the cost is spread as decline in value over the asset's effective life, by prime cost or diminishing value, with the method locked in once you choose it for that asset. Either way you claim only the work-use share, apportioned for part-year ownership. You cannot split a set or a pair of matching items to duck under the line. The decline in value of your desk, chair and monitor is the one equipment claim you make on top of the fixed-rate working-from-home hours, not inside it. Leave employer-supplied gear off, keep the repairs claim to its work share, and hold the receipts and your work-use working behind all of it.

General information only, not tax advice. Check the ATO or a registered tax agent for your situation.