Working from home is one of the most claimed — and most reviewed — deductions in Australia. There are two accepted methods, and the difference between a solid claim and a rejected one is almost always the records you kept during the year.
Method 1: the fixed rate
You claim a set amount for every hour you genuinely worked from home. That single rate covers:
- Electricity and gas for lighting, heating and cooling
- Home and mobile internet and data
- Home and mobile phone usage
- Stationery and computer consumables
Because those costs are inside the rate, you cannot claim them again separately. You can still claim:
- Decline in value of a computer, desk, chair or office equipment
- Repairs and maintenance of those assets
- Cleaning of a dedicated home office (if you have one)
Method 2: actual costs
Here you work out the real work-related portion of each expense. For electricity that means the cost per unit, the hours used, and the equipment running. For internet it means a reasonable work-use percentage supported by a representative record.
It takes more effort, but for people with a dedicated office and long hours it often produces a bigger deduction than the fixed rate.
What you cannot claim
- Coffee, tea, milk and other general household items
- Rent, mortgage interest, council rates or house insurance (for most employees)
- Items your employer already paid for or reimbursed
- School or childcare costs while you work at home
Common questions
- What is the fixed rate for working from home?
- The ATO's fixed rate method lets you claim a set number of cents for each hour you work from home, which covers energy, internet, phone and stationery in one figure. The rate is set by the ATO and has changed several times in recent years, so we confirm the current rate for your income year before lodging.
- What records do I need to keep?
- Under the fixed rate method you need a record of the actual hours worked from home for the whole income year — a diary, roster, timesheet or app log. Estimates and four-week samples are no longer accepted. You also need one bill for each expense the rate covers, to show you incurred the cost.
- Is the actual cost method better?
- It can be, especially if you have a dedicated home office and high energy costs. It means apportioning each expense between work and private use and keeping the evidence for it. We usually calculate both methods and use whichever gives the larger legitimate deduction.
- Can a sole trader claim more than an employee?
- Often yes. A sole trader running a business from home may also be able to claim a portion of occupancy costs where part of the home is genuinely a place of business, though this can affect capital gains tax when you sell. It is worth discussing before you claim.
- Do I need a separate room to claim?
- Not for the fixed rate method — working at the kitchen table still counts for the hours you actually work. A dedicated area matters for cleaning and occupancy-type claims.
Want your deductions checked properly?
We calculate both methods, use the one that legitimately gives you more, and lodge your return as a registered tax agent. See our tax return services.
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