Work-from-home tax deductions in Australia: fixed rate and actual cost methods

What can you claim for working from home?

If you work from home (WFH) and incur costs as a result, you may be able to deduct those costs from your taxable income. The ATO accepts two methods for calculating WFH deductions.

Method 1: Fixed Rate (67 cents/hour → 70 cents/hour)

Rate: 67 cents/hour for the 2022–23 year; 70 cents/hour from 2023–24 onwards.

The fixed rate covers:

Energy (electricity and gas) for your home working space.
Internet (the work-related portion).
Phone (the work-related portion).
Stationery and office consumables.
Decline in value (depreciation) of equipment — computers, monitors, furniture.

What you must keep: a record of your actual hours worked from home throughout the year — diary, calendar, timesheets, rosters. The ATO no longer accepts a 4-week representative period as proof for the whole year (changed from 2022–23 onwards).

Important: once you use the fixed rate, you cannot separately claim electricity, internet or phone — they are already included. You may still separately claim depreciation on equipment bought exclusively for work that is not otherwise captured in the rate.

Example: 40 weeks × 5 days × 8 hours = 1,600 hours → 1,600 × $0.70 = $1,120 deduction.

Method 2: Actual Cost

Under this method, you claim the actual costs you incurred for working from home:

The work-related portion of electricity and gas (calculated as a percentage of floor area and hours used).
The work-related portion of internet and phone.
Depreciation of furniture and equipment.
Stationery and consumables.

Requirements: full receipts and invoices for each expense, plus a method to demonstrate the proportion used for work vs. personal use. More complex to calculate but can produce a higher deduction when actual costs are significant.

What you cannot claim

Using either method, you cannot claim:

Rent or mortgage interest (unless you rent a dedicated office space separately — not applicable to most WFH situations).
Coffee, food or beverages consumed at home.
Childcare costs.
General home repairs or maintenance.

Record-keeping requirements

Hours log — maintained throughout the year, not reconstructed after the fact.
Receipts for any equipment purchased for work purposes.
Evidence of WFH arrangement — employer communication confirming WFH, schedule, or similar documentation.

Financial year and lodgement deadlines

The Australian financial year runs 1 July to 30 June. The lodgement deadline for individuals filing their own return via myTax is 31 October. If you use a registered tax agent, the deadline can extend to May of the following year.