Working from Home Tax Deductions Australia 2025-26: What You Can Claim

Worth knowing: From 1 July 2022, the ATO replaced the old shortcut method (80 cents per hour, introduced during COVID) and the previous fixed rate method (52 cents per hour) with a single revised fixed rate of 67 cents per hour. This rate covers the incremental costs of electricity, phone expenses, internet expenses, stationery, and computer consumables incurred while working from home.

You can claim 67 cents for each hour you work from home during the income year. On top of this fixed rate, you can separately claim the decline in value (depreciation) of any home office furniture and equipment you've purchased — such as a desk, office chair, computer, monitor, printer, or headset. This means the total WFH deduction can be significantly higher than 67 cents per hour when equipment depreciation is included.

To use the revised fixed rate method, you must keep a record of the actual hours you work from home for the entire income year. The ATO accepts timesheets, roster records, time-tracking apps, diary entries, or login/logout records as evidence.

A generalised estimate or simple statement like 'I work from home three days a week' is not enough — you need contemporaneous records showing the actual hours worked from home on each day. For the separate depreciation claim on equipment, you need buy receipts and records of the percentage of work use versus personal use. If your home office equipment is used 80% for work, you can claim 80% of the depreciation.

These record-keeping requirements are stricter than the COVID-era shortcut method, and the ATO has flagged WFH deductions as a key compliance focus area.

Bottom line? Instead of the fixed rate method, you can calculate and claim the actual costs of working from home. This involves determining the work-related proportion of each expense: electricity (based on the area of your home office as a percentage of total floor space, adjusted for hours of use), phone and internet (based on your work-use percentage — a four-week diary can establish this), office supplies, and depreciation on equipment and furniture.

The actual cost method requires more record-keeping but may yield a larger deduction if you've a dedicated home office, high electricity costs, or expensive internet plans. For example, if your electricity bill is $2,500 per year and your home office represents 15% of your home's floor space, used 8 hours a day for 230 working days, the actual electricity deduction could be $375, compared to $215 under the fixed rate method (assuming the same hours). Run both methods to see which gives you a higher total deduction.

You can claim: the 67-cent-per-hour fixed rate OR actual running expenses (not both), decline in value of home office furniture and equipment (desk, chair, computer, monitor, printer, headset), repairs to home office furniture and equipment, and cleaning costs for a dedicated home office. You can't claim: rent or mortgage interest payments (unless you run a business from home and have a separate dedicated area), general household expenses like water or body corporate fees, coffee, snacks, or groceries consumed while working from home, costs already covered by the 67-cent rate if using that method (you can't double-dip on phone and internet), and items provided by your employer.

Importantly, if you only occasionally work from home, you can still claim for the hours you work there — there's no minimum requirement. Even one day per week of WFH generates a legitimate deduction.

To maximise your working from home deduction, start tracking your hours from 1 July using a dedicated method. Consider purchasing necessary home office equipment before 30 June to claim depreciation in the current year — items costing $300 or less can be claimed as an immediate deduction.

So what does this actually mean? If you've a dedicated room used solely as an office, the actual cost method may yield higher deductions than the fixed rate, particularly for electricity and cleaning. If you buy a laptop or computer costing more than $300, it's depreciated over its effective life (typically four years), so you can claim 25% of the work-use proportion each year. A $2,000 laptop used 90% for work would generate a deduction of $450 per year for four years.

Combine the fixed rate claim with these separate equipment depreciation claims for the maximum total deduction. Use our Tax Calculator to see how your WFH deductions affect your overall tax position and refund.