An employee’s regular place (or places) of work may change over time where they establish a second (or subsequent) work location as a regular place of work.
The ATO states (in paragraph 26 of TR 2019/D7) that a ‘three-month rule of thumb’ generally applies in determining whether a new regular place of work has been established. Under this rule of thumb, an employee based at a particular work location generally establishes a new regular place of work if they commence work at a new work location at which their actual or anticipated duration is three months or more.
It is important to note, however, that the three-month rule of thumb is not a hard and fast rule as a longer or shorter duration may be appropriate in particular circumstances. Factors that may affect the duration of the three-month rule of thumb including the following:
- Nature of employment – an employee attending a new work location for a period shorter than three months is more likely to have established a regular place of work at that location when they are on a short-term contract (in comparison with a permanent employee).
- Frequency – the frequency at which an employee attends a new work location impacts when they are regarded to have established a new regular place of work at that location. This may be longer or shorter than the three-month period (under the rule of thumb) depending on the facts and circumstances surrounding the employment arrangement.
- The fact that an employee attends a new work location for a period shorter than three months may not preclude that location from being considered a new regular place of work where the employee has attended the location frequently during that period.
- In contrast, a new work location may not constitute a regular place of work even if an employee is based there for three months or more, provided their attendance at the location is sufficiently infrequent. In this regard, the ATO states (in paragraph 26 of TR 2019/D7) that an employee attending new work location once a fortnight for four months is not usually considered to have established a regular place of work at that location
- Element of choice – an element of choice on an employee’s part (e.g., as to where to live) has a bearing on whether they have changed their regular place of work. Where an employee chooses to work at a new work location (rather than being required to do so by their employer), they are more likely to have established a regular place of work at that location.
- Travel on work time or travel under an employer’s direction and control – an employee’s travel to a new work location is more likely to be regarded as part of their employment duties (rather than being a prerequisite to the commencement of their work duties) where this occurs on work time, or substantively under their employer’s direction and control.
Where an employee has changed their regular place of work, any expenses they may incur in relocating to their new work location are not deductible. These expenses are private in nature and are undertaken as a prerequisite to work.