WFH Tax Deductions 2026: Claim the Right Amount Before 30 June

The 2025-26 income year runs from 1 July 2025 to 30 June 2026. Tax returns are lodged from 1 July 2026 (self-lodging) or by 31 October 2026 if using a registered tax agent. Now — before 30 June — is the time to get your records in order and consider any end-of-year purchases that could boost your deduction.

The ATO's revised fixed rate of 67 cents per work-from-home hour continues to apply for 2025-26, unchanged from the prior year. The fixed rate covers electricity, phone, internet, stationery, and consumables. You can still claim depreciation on equipment and furniture separately.

One change for 2025-26: the ATO has increased its data-matching focus on WFH claims, cross-referencing claimed hours against employer records, timesheets, and leave entitlements. Make sure your claimed hours are realistic and documented. Use our Tax Calculator to estimate how your deductions affect your refund.

If you're planning to buy home office equipment, consider purchasing before 30 June 2026 to get the deduction in the 2025-26 tax year rather than waiting until 2026-27. Relevant purchases include:

• Computer equipment: Laptops, monitors, keyboards, mice. Items costing $300 or less and used more than 50% for work can be immediately deducted in full. Items over $300 are depreciated over their effective life.
• Office furniture: A desk, chair, lamp, or bookcase used for work. The work-related proportion is deductible, depreciated over 10 years (desk) or 10 years (chair).
• Phone and internet plans: If your current plan is inadequate for work use, upgrading before 30 June means the full year's work portion applies.

The instant asset write-off threshold for small business owners is $20,000 for 2025-26. If you're self-employed and work from home, this may apply to your office fit-out.

The ATO flags WFH claims that look inconsistent or implausible. Common audit triggers include:

• Claiming more than 8 hours per day working from home on days you were also at the office or on leave
• Round-number hour totals (e.g., claiming exactly 1,000 hours) without specific records
• Claiming the full home internet plan cost as a work expense without a usage split
• Deducting items your employer already provided or reimbursed
• Switching methods year-to-year without clear reason

The safest approach: use a timesheet app, your work calendar, or your employer's system as the primary log of hours. Screenshot or export that data before the financial year ends, as some systems purge old data.

If you run a business from home as a sole trader, your WFH deduction entitlements are broader than for employees. You can claim the occupancy cost of your dedicated workspace — a proportional claim on rent or mortgage interest, council rates, and home insurance — as well as all running costs.

However, claiming occupancy costs triggers the CGT home exemption issue: when you sell your home, the proportion claimed as a business deduction may be subject to capital gains tax. Many sole traders choose not to claim occupancy costs for this reason. This is a significant decision and worth discussing with a registered tax agent before you lodge.

Sole traders should also ensure they are claiming all allowable business expenses separately from WFH claims: professional development, professional memberships, software subscriptions, and marketing costs are all deductible in full.

Can my employer pay me a WFH allowance and I still claim a deduction?
If your employer pays a WFH allowance that is included in your assessable income (shown on your payment summary), you can still claim a deduction for the actual expense. If the allowance fully covers your costs, the net deduction may be nil. If your actual costs exceed the allowance, you can claim the difference.

I worked from home three days a week — how many hours do I record?
Record actual hours worked, not just the days. If you work 7.5 hours on each WFH day, and you had 140 WFH days in the year, your total is 1,050 hours. At 67 cents, that's $703.50.

Can I claim a deduction for a standing desk I bought in March 2026?
Yes. The depreciation deduction applies from the date you first use the item for work. A desk purchased in March 2026 would give you a partial-year depreciation deduction for the 2025-26 year and a full-year deduction in subsequent years.

What's the difference between the WFH deduction and a salary sacrifice arrangement?
They are separate. A salary sacrifice arrangement reduces your taxable income before tax is calculated. A WFH deduction reduces it at tax return time. Both are legitimate — they just work differently. See our Take Home Pay Calculator for more.