Work from home deduction
A claim for the extra running costs of working from home, using either a fixed hourly rate or actual costs.
The fixed rate method allows 70 cents per hour worked from home for FY2025-26, covering electricity, gas, internet, phone, stationery and computer consumables in a single rate.
The actual cost method requires you to work out the real work-related portion of each expense, which takes more effort but can produce a larger claim for people with a dedicated space and high usage.
Under the fixed rate you must keep a record of every hour worked from home across the year — estimates and representative four-week diaries are no longer accepted.
What the fixed rate produces
Working from home two days a week for 46 weeks at roughly 7.6 hours a day is about 700 hours. At 70 cents that is a $490 deduction.
The bit people get wrong
Using the fixed rate means you cannot separately claim internet, phone, or electricity — they are already inside the rate. Claiming them again is one of the errors the ATO looks for most closely.
Common questions
What is the fixed rate for FY2025-26?
70 cents per hour worked from home, covering energy, internet, phone and consumables. It rose from 67 cents in earlier years.
Can I claim rent or mortgage interest?
Employees generally cannot claim occupancy costs. Doing so as a business owner can also jeopardise part of your main residence CGT exemption.
Can I still claim my desk and chair?
Yes. Furniture and equipment are outside the fixed rate and are claimed separately, either immediately or by depreciation depending on cost.
Run your own numbers
Related terms
Source: Australian Taxation Office