Working from home (WFH) has been around for years, but since the COVID pandemic Australian organisations have really embraced it, both to trim expenses and to offer employees a genuine work-life balance.
For workers, there are obvious costs that come with WFH, like higher utility bills and the odd internet upgrade, but these are often outweighed by the benefits. What tends to fly under the radar are the not-so-obvious consequences: those quiet, often intangible impacts that can shape your career or your long-term financial position.
Here are a few hidden WFH traps worth keeping an eye on.
Capital Gains Tax (CGT)
Under normal circumstances, your main residence is exempt from CGT. However, there are some finer, more complex points that could put that exemption at risk and leave you with a CGT liability.
According to the Australian Taxation Office (ATO), most WFH employees who claim things like electricity, internet and phone using the ATO’s fixed-rate work from home method won’t run into CGT problems. The trouble is that certain loopholes had previously allowed some workers to claim large deductions, and the ATO has recently closed those off, which could catch unsuspecting WFHers by surprise.
To understand the intricacies and make sure you protect your exemption status, it’s vital to speak with your tax adviser before claiming any WFH expenses.
Out of sight, out of mind
That old saying is particularly relevant when it comes to career progression.
A study by LinkedIn suggests that WFH can quietly hold back career advancement through a few different channels: invisibility from the lack of face-to-face interaction, reduced access to training, limited opportunity to demonstrate leadership, and a general sense of disconnect.
The fact is, if you’re just a thumbnail image or a system-generated avatar on someone’s screen, it’s hard to stand out from the crowd. Explaining a concept or showcasing your work is trickier when it isn’t done in person, and finding chances to display leadership or teamwork is harder again. And if you’re the company newbie, there’s no faster way to upskill than sitting alongside a more experienced team member, which is almost impossible to replicate remotely.
Job security
Here’s an uncomfortable one: if your job can be done from your home, chances are it can be offshored, or even replaced by an AI chatbot.
Companies are forever looking for ways to cut costs, and they’re engaging skilled, inexpensive overseas contractors across an ever-widening range of roles. It’s been happening for years in industries like banking and telecommunications. So how do you stop your job heading the same way? Start by proving your relevance and the value you add to the organisation, and by staying visible.
Insurance
Regardless of where you work, your employer has to maintain a safe working environment. So what happens if you’re working from home and you’re injured? What if you’re injured on a break, or after you’ve logged off for the day?
It’s important to know your rights and understand your obligations. As WFH becomes more common, there’s a real question about whether we’re setting ourselves up for a legal headache. Fair Work Australia and other regulatory bodies are paying close attention, but there’s still a lot of grey area.
Protect yourself with knowledge
The best defence here is being informed. Reach out to a tax or financial adviser about the financial implications, speak to a professional who specialises in workplace law to understand your rights and responsibilities, and have a chat with your HR department about making the most of your career opportunities.
WFH has genuine advantages, but it’s worth making sure the perks you enjoy today don’t quietly work against your future. The financial side of that, from tax outcomes to protecting your income and building long-term wealth, is exactly what we help clients across Newcastle and the Hunter think through as part of our financial planning and personal insurance conversations.
Talk to Virtuous Wealth
If you’d like to talk through how working from home fits into your bigger financial picture, we’d love to help. Get in touch with our Newcastle team to book a no-obligation conversation.
This article provides general information only and does not take into account your personal objectives, financial situation or needs. Before acting on any information, you should consider its appropriateness, having regard to your own circumstances, and seek personal financial advice from a licensed adviser.
