Work From Home Tax Deductions Australia: What You Can Claim (2026 Guide)

The ATO currently allows two methods for claiming WFH deductions: the Revised Fixed Rate Method (67 cents per hour) and the Actual Cost Method. You choose one method per income year and can switch between years.

The Fixed Rate Method is simpler. The Actual Cost Method is more complex but can deliver a larger deduction if your actual home running costs are significant - particularly if you have a dedicated home office and high energy costs.

This method covers most WFH running costs in a single rate. Key details:

• Rate: 67 cents per hour worked from home (introduced March 2023, replacing the previous 52 cents rate).
• What it covers: Electricity and gas, internet (the work-related portion), mobile and home phone (work-related portion), computer consumables (ink, paper), and stationery.
• What it does NOT cover: Decline in value (depreciation) of home office equipment (computer, desk, chair) - these are claimed separately.
• Record keeping required: You must keep a record of every hour worked from home. A timesheet, roster, diary, or similar contemporaneous record is required - the ATO no longer accepts a 4-week representative diary extrapolated across the year.
• How to calculate: Total WFH hours in the year × $0.67. For example: 800 hours WFH × $0.67 = $536 deduction.
• You can still claim: Separately, the cost of a dedicated phone plan used for work, and depreciation of work-use equipment.

More complex but potentially higher deduction - best for those with a dedicated home office:

• Calculate the floor area of your home office as a percentage of total home floor area.
• Apply that percentage to occupancy running costs: electricity, gas, cleaning, depreciation of home office furniture.
• Claim the work-use proportion of phone and internet bills (requires a usage log for at least one representative 4-week period).
• Claim the decline in value of work equipment (laptop, monitor, desk chair) based on work-use percentage.
• Mortgage interest or rent is NOT claimable under this method unless you run a formal business from home (separate test - and triggers partial CGT main residence exemption loss on sale).
• Records required: All receipts, invoices, and a clear floor area calculation. More intensive but can deliver significantly higher deductions for high-usage WFH workers.

Regardless of which method you use, you can separately claim work-use equipment:

• Computer/laptop: If used for both work and personal use, claim the work-use percentage of depreciation over its effective life.
• Monitor, keyboard, mouse: Same work-use percentage approach.
• Desk and ergonomic chair: Claim depreciation over effective life (8 years for a desk; 5 years for a chair) at work-use proportion.
• Phone: Monthly plan cost × work-use percentage (requires a 4-week usage log).
• Items costing $300 or less with predominantly work use: Can be claimed in full in the year of purchase rather than depreciated.

Coffee, tea, and snacks consumed at home while working. General household costs like mortgage interest, rent, rates, and insurance (unless you meet the formal home-based business test). Cost of travelling from home to work (unless home is genuinely your base of operations for work). Personal proportion of any jointly used item.

The ATO has explicitly stated it will scrutinise WFH claims - particularly internet claims where the full cost is claimed without any personal-use apportionment.

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