Mobile Phone Costs — Australia Tax Rules

Claim the work-related proportion of your mobile phone plan and handset cost.

Claimable: Partially claimable · Tax authority: ATO

ATO Rules

• Claim the work-related percentage of your phone bill based on actual usage.
• If the phone is used 100% for work, claim the full cost — but the ATO will question this if you have no separate personal device.
• For dual-use phones, review 4 weeks of itemised bills to establish a reasonable work-use percentage.
• The handset cost can be depreciated over its effective life (typically 3 years), or claimed under instant asset write-off if under A$20,000 and you are a small business.
• If you use the 67c/hr fixed rate home office method, your phone and internet costs are already included for the hours you work from home — do not double-count.
• A dedicated business SIM or separate work phone can be claimed at 100%.

Limits

No fixed cap — must be based on actual work-use proportion. Handset depreciated over 3 years or instant write-off if eligible.

Worked Example

Ben's phone plan costs $1,440/year. He reviews 4 weeks of itemised bills and determines 65% is work-related. He claims $1,440 × 65% = $936. He bought a new handset for $900 — as a small business entity he claims it immediately under the A$20,000 instant asset write-off at 65% = $585.

Record Keeping

• Keep phone bills for the full year
• Review 4 weeks of itemised bills to establish work-use percentage
• Keep handset purchase receipts for depreciation or instant write-off
• Note if phone costs are included in the 67c/hr home office rate for hours worked from home
• Document your work-use percentage with reference to the 4-week diary review

Frequently Asked Questions

Can I claim my phone if I already use the 67c/hr home office rate?

The 67c/hr rate includes your phone costs for hours worked from home — you cannot claim phone costs separately for those hours. However, you can still claim the work proportion of calls made when you are out of the home office (at client sites, in the car, etc.).

How do I work out the work-use percentage?

Review 4 representative weeks of itemised phone bills. Calculate the ratio of work calls and data to total usage. Apply this percentage to the full year's bill.

Can I claim a new phone outright?

If the phone costs A$300 or less, you can claim an immediate deduction for the full business-use proportion. Over A$300, depreciate over its effective life (3 years for mobiles), or if you are a small business entity, use the A$20,000 instant asset write-off for the business-use portion.

Is a separate business mobile phone fully deductible?

Yes. A phone used exclusively for business with zero personal use can be claimed at 100% — both the plan and the handset. The ATO is more likely to accept 100% if you have a separate personal phone and can demonstrate the business phone is not used personally.