If you work from home for your job, even a couple of days a week, you can usually claim a deduction for the extra running costs. The ATO gives you two ways to work it out, and the one you choose decides which records you need to keep.
Who can claim
You can claim working-from-home expenses when all of the following apply:
- You were working from home to do your job, not just checking emails or taking the occasional call.
- You paid the extra costs yourself and weren't reimbursed by your employer.
- The costs are extra running expenses you have because you work from home, such as more electricity or internet use.
- You have records that show it.
Method 1: the fixed rate method
You multiply the number of hours you worked from home by the ATO's fixed hourly rate. The rate was 67 cents per hour for 2022–23 and 2023–24, and 70 cents per hour from 2024–25. The ATO reviews the rate from time to time, so we always apply the correct rate for the year you are lodging.
The rate covers:
- Electricity and gas for heating, cooling and lighting
- Internet and mobile or home phone use
- Stationery and computer consumables, such as printer ink and paper
You can't also claim those expenses separately. You can still claim the decline in value (depreciation) of equipment and furniture you use for work, such as a desk, chair, monitor or laptop, plus repairs to them.
Mia works from home two days a week, 8 hours a day, for 46 weeks of the year. That's 736 hours. At 70 cents per hour, her running-expenses deduction is $515.20. She also bought a $250 office chair that she uses only for work, which she can claim in full because it cost $300 or less.
Records you need for the fixed rate method
- A record of all the hours you actually worked from home for the whole year, such as timesheets, rosters, a diary or a spreadsheet kept as you go. An estimate or a four-week sample is not enough.
- One document for each type of expense covered by the rate, such as one electricity bill and one phone or internet bill, to show you paid for them.
Method 2: the actual cost method
With this method you claim the actual extra costs you incurred, working out the work-related portion of each one. It can produce a bigger deduction, for example if you work from home full time in a cold climate, but it needs much more detailed records: itemised bills, and a reasonable way to show how much of each cost relates to work (such as a four-week diary of phone use, or the extra electricity used by your work equipment).
If you are unsure which method gives you the better result, it is worth asking. We can work out both and claim the one that suits you, as long as your records support it.
Equipment and furniture
- Items costing $300 or less that you use mainly for work can usually be claimed in full in the year you buy them.
- Items over $300, like a laptop or a sit-stand desk, are claimed over their effective life through depreciation.
- If you also use an item privately, you can only claim the work-related percentage.
What you can't claim
- Occupancy costs such as rent, mortgage interest, council rates and home insurance. Employees generally can't claim these.
- Tea, coffee, milk, toilet paper and other general household items
- Costs your employer paid for or reimbursed
- Equipment or devices your employer supplied
- Expenses for a child's education, such as a laptop used for schoolwork
Get it right the first time
Working-from-home claims are one of the areas the ATO checks closely, so good records matter. Bring your hours record and bills along with the rest of our tax return checklist, and we'll make sure you claim everything you're entitled to. Simple returns start from $109, or book a free 15-minute call to talk it through.
