How can I properly claim my mobile expenses?
With the end of the financial year fast approaching, it’s worthwhile making sure that you claim the appropriate amount for your personal mobile expenses.
The question of how to claim for your mobile expenses is a relatively complex one, because it relates directly to tax matters that can understandably differ depending on your circumstances. This isn’t intended to be an exhaustive guide, and if you’re in any doubt we’d strongly suggest seeking the advice of a qualified tax professional.
Mobile plans: What can I claim?
The key thing to keep in mind when making a tax related claim as it relates to mobile usage is that you have to be able to prove genuine work-related usage in order to claim it as a genuine tax deduction. That means that for almost any mobile you’ve got to sort out how much of your actual usage is work-related, and how much of it is personal. Your usage proof should only include calls made for work-related purposes, whether that’s in the form of the number of overall calls or a percentage of total time spent on work-related calls. Obviously this may vary depending on the calling inclusions with your mobile plan as well.
The ATO provides guidelines for low-cost usage, where you’re claiming less than $50 in a calendar year as it relates to mobile telephony only. These claims you can make without having to provide substantiated proof of usage up to that limit only, where you can claim $0.75 each for work calls made from your mobile and $0.10 each for text messages sent from your mobile.
If you’re going to claim more than $50 in mobile phone related costs, the ATO requires you to keep records for at least a four week representative usage period to back up your mobile phone usage claims, which you then calculate out as an average over the entire financial year. These records can take the form of a physical log of calls, electronically produced logs or bills that show the relative usage and costs incurred. Depending on the nature of your work, you may also be required to provide proof that your employment includes an at-home or off-site component that includes the use of mobile telephony and data services.
As data is typically included in the bundle price of most mobile services you can claim usage at a proportional level, because there's no way to break it out. The exception to this at a personal level is that the ATO does not allow claiming for excess data usage charges.
Mobile phones: What can I claim?
You may also be able to claim depreciation on your mobile handset over the course of a year if it is used for work purposes, but again this is subject to proportional usage. If you purchased a mobile phone that you only ever used during work hours for work purposes it could potentially be entirely claimable, but you’d need strong evidence to prove that it was never used at a personal level, given that most of us carry our mobiles with us all the time.
As a mobile phone could count as a "tool" for the purposes of depreciation, how you claim for it will depend on how much you paid for it if purchased outright. If you purchase a phone that costs $300 or less, it may be able to be claimed immediately relative to its proportional use, although there are usage tests that apply to making a claim in this way. Mobile phones with an outright cost of more than $300 will need to be depreciated, which means you can’t claim the full deduction in a single tax year, but instead claim a deduction based on their decline in value.
Mobile phones: What if my employer pays for it?
The big exemption for all of these potential claims is that the ATO doesn’t allow claims if your employer is the one footing the bill for either mobile usage or indeed mobile handsets. The same is broadly true for any kind of IT-related expense; the ATO’s notes on work-related expenses clearly state that:
"You cannot claim any deduction for the decline in value of laptops, portable printers, personal digital assistants, calculators, mobile phones, computer software, protective clothing, briefcases and tools of trade primarily for use in your employment if the item was provided to you by your employer, or some or all of the cost of the item was paid or reimbursed by your employer, and the benefit was exempt from fringe benefits tax."
As such, if your workplace provides a phone, it's feasible that they may be able to claim it, but you won't.