Working from home deductions: how to claim them with the ATO

The ATO gives employees two options for running costs:

• Fixed rate method: a set amount per hour worked from home. It’s 70 cents per hour for 2024–25 and 2025–26. Earlier rates were 67 cents (2022–23 and 2023–24) and 52 cents (2020–21 and 2021–22).
• Actual cost method: you work out the real work-related share of each expense.

The fixed rate is simpler. The actual cost method can give a bigger deduction if you have a dedicated office, run heating or cooling for long hours, or pay a lot for internet, but it needs far more paperwork. For later income years, check the current rate on ato.gov.au before you lodge.

The fixed rate already includes:

• Energy (electricity and gas) for heating, cooling and lighting
• Internet
• Mobile and home phone usage
• Stationery and computer consumables, like printer ink and paper

You can’t claim those separately on top. You can claim separately for the decline in value of work equipment such as a desk, chair, computer or monitor, and for repairs to that equipment.

Example: if your records show 800 hours worked from home in 2025–26, the fixed rate deduction is 800 × $0.70 = $560.

• Actual hours for the whole income year. Since 1 March 2023 the ATO won’t accept an estimate or a four-week sample for this method. Timesheets, rosters, logs from work systems or a diary all work.
• One document for each type of expense covered by the rate, showing you paid it, for example one electricity bill and one phone bill.
• Records for anything you claim separately, such as receipts for a laptop or chair.

Keep your records for five years from the date you lodge.

You calculate the work-related portion of each running cost. For example, the electricity used by your work devices and the lighting and cooling of the room while you’re working. For records you need:

• Your hours worked from home for the whole year, or a diary covering a continuous four-week period that reflects your usual pattern
• Receipts and bills for each expense
• How you worked out the work-related share

For phone and internet, you can work out your work-use percentage from an itemised bill over a representative four-week period and apply it to the year.

• Occupancy costs like rent, mortgage interest, council rates and home insurance, for most employees
• Expenses your employer reimbursed
• Coffee, tea, snacks and other private costs
• Equipment or services used for private purposes, beyond the work-related share
• Costs for days you only did minimal tasks like checking a few emails

This is general information, not tax advice. If your situation is unusual, such as running a business from home, the rules are different.

Tax time starts on 1 July. To lodge yourself through myTax, you need a myGov account linked to the ATO. Self-lodgers are generally due by 31 October. When 31 October falls on a weekend, as it does in 2026, the ATO moves the due date to the next business day, but lodging earlier is safer.

If you use a registered tax agent, you can usually lodge later, but you must be on their client list before 31 October.

If you’d like a second opinion on which method suits your records, you can ask an expert in a $1 chat (priced in USD) at helpbyexperts.com.