Can I Claim Mobile Phone as a Business Expense in Australia?
Yes, mobile phone costs used for work are deductible based on business use percentage. Provide a representative 4-week diary, then apply that % to the year's bills.
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What Australian Taxation Office (ATO) says
ATO accepts a 4-week representative diary to establish work-use percentage. Apply to itemised bills or the contracted plan cost. Phone hardware is depreciated over the asset's effective life (3 years for phones). A person can claim only the work-related share of a plan, based on the diary or on itemised bills. A representative diary for four continuous weeks sets the percentage, and the result can be used for the year unless usage changes materially. The deduction for a phone handset is the decline in value, or the whole cost of a low-cost item under the instant asset write-off. Hardware under the instant asset write-off is claimed in full in the year of first use if the business is eligible and the cost is under the limit.
When you can claim
- Apportioned monthly plan cost (work %)
- Apportioned itemised call charges
- Phone hardware depreciation (or instant asset write-off if under threshold)
- Cases, screen protectors used for the work phone
- Data costs for work that are separately billed
When you cannot claim
- Private call charges
- Family member's phone on a business plan
- Pre-existing phone costs that have not changed due to work use
- A phone bought and used by a spouse who has no role in the business
Good to know
Pro tip: Keep the first four weeks of the diary and the itemised bill that covers them. If a new plan is chosen later, the diary can still support the percentage as long as the pattern of use is much the same. For a business-owned phone given to staff, FBT usually does not apply when private use is limited and the phone is primarily for work. Keep the policy that says so.
Important: Employees cannot claim a phone plan that the employer already pays for. A business that pays employees a phone allowance should write a policy, because an allowance can be treated as income of the employee unless it reimburses real work costs.
Related expenses
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