Working From Home Tax Deductions: What You Can Claim in Australia

If you work from home — even part of the time — you can claim a deduction on your Australian tax return. The ATO allows two methods: the revised fixed rate method and the actual cost method. Each suits different situations, and you cannot combine them in the same income year.

The revised fixed rate method lets you claim 67 cents per hour for every hour you work from home. This rate, which has applied since 1 July 2022, covers electricity, gas, phone usage, internet, stationery, and computer consumables. You must keep a record of actual hours worked — the ATO no longer accepts a four-week diary estimate.

The actual cost method lets you claim the work-related proportion of every actual expense: electricity, phone, internet, depreciation on equipment, office furniture, cleaning, and more. This method requires more recordkeeping but can result in a larger deduction for people with a dedicated home office and significant equipment costs.

Use our Income Tax Calculator to see how deductions reduce your overall tax bill.

The revised fixed rate of 67 cents per hour covers a bundled set of expenses:

• Electricity and gas for heating, cooling, and lighting your work area
• The work-related portion of your phone and internet costs
• Stationery and computer consumables (printer paper, ink, pens)
• The decline in value of basic computer equipment

It does not cover: depreciation of furniture and office equipment (desks, chairs, monitors), cleaning expenses for a dedicated home office, or the cost of portable devices like a second phone or tablet. You can still claim these separately on top of the fixed rate.

To calculate your deduction, multiply your WFH hours by 67 cents. For example, working 30 hours per week from home across 48 working weeks of the year equals 1,440 hours. At 67 cents, your deduction is $964.80 — plus any additional equipment claims on top.

The actual cost method is better suited to people who have a dedicated home office — a room used exclusively or almost exclusively for work — or who have made significant capital purchases such as a standing desk, ergonomic chair, or dual monitors.

Under this method, you work out the work-related percentage of each expense. For electricity, you divide the floor area of your home office by your home's total floor area, then apply the percentage to your electricity bill. For phone and internet, you need a four-week representative log of work versus personal use.

Depreciation is claimed using the ATO's effective life tables. A laptop (3-year effective life using the diminishing value method) and an office desk (10-year effective life) each give you a yearly deduction based on their cost and usage proportion.

The ATO's myDeductions tool in the ATO app can help you log records throughout the year rather than scrambling at tax time. This method rewards good habits with a potentially larger deduction — sometimes two to three times the fixed rate amount.

Whichever method you use, record-keeping is non-negotiable. The ATO has been increasingly scrutinising WFH claims since the pandemic-era surge in home office deductions.

For the fixed rate method: keep a log of all actual hours worked from home — a timesheet, roster, diary entry, or the time tracking in your employer's system. A sample four-week period is no longer sufficient.

For the actual cost method: keep receipts and invoices for all expenses claimed, plus evidence of the work-related percentage (electricity bills, phone bills, a floor plan showing room measurements, and usage logs).

Keep all records for five years from the date you lodge your return. If you use cloud storage (Google Drive, iCloud), scan and save receipts there as they come in. One audit notice from the ATO can undo years of deductions if you can't produce the documentation.

Can I claim WFH deductions if my employer pays for my equipment?
No. You can only claim expenses you personally incurred. If your employer provided you with a laptop, chair, or internet reimbursement, those expenses are not claimable.

Can I claim rent or mortgage interest as a WFH expense?
Generally no, unless you carry on a business from home (not just work remotely as an employee). Rent and mortgage interest deductions for employees would make your home partially subject to capital gains tax when you sell, which is a significant trade-off.

What if I worked from home for only part of the year?
You can claim for the hours you actually worked from home. If you returned to the office halfway through the year, simply calculate the hours you worked from home in the first half.

Do I need a separate room to claim WFH deductions?
No — you don't need a dedicated room under either method. However, the actual cost method is harder to calculate without a separate space because it's difficult to apportion electricity and floor area. The fixed rate method works whether you're at the kitchen table or in a dedicated office.

Is the 67c rate changing for 2025-26?
The rate has been 67 cents per hour since 1 July 2022 and has not been changed for 2025-26. Check the ATO website for any updates announced in the Federal Budget.