Work From Home Tax Deductions 2026: What Australians Can Claim
Last updated: August 2026 · For the 2025–26 Australian financial year
Key Takeaways
- You can claim WFH deductions using the fixed rate method (70c per hour) or the actual cost method.
- The ATO requires a record of all hours worked from home — estimates are not accepted.
- From 2025–26, you may be able to instantly deduct assets up to $1,000 under new rules.
- Use our free WFH hours tracker to log every hour — no account needed.
What Are Work From Home Tax Deductions?
If you work from home as an employee or business owner, you can claim a deduction for the additional expenses you incur. The Australian Taxation Office (ATO) allows you to claim a portion of your home office running costs — things like electricity, internet, phone, stationery, and depreciation on office equipment.
To claim, you must have actually worked from home (not just checked emails) and you must keep records showing how many hours you worked.
Fixed Rate Method (70c per hour)
The simplest method. You claim 70 cents for every hour you work from home. This rate covers:
- Electricity and gas (heating, cooling, lighting)
- Internet expenses
- Phone expenses (mobile and home)
- Stationery and computer consumables
You can also claim separate deductions for decline in value of assets (e.g. desk, chair, computer) and any cleaning costs if you have a dedicated home office.
Example: Sarah works from home 3 days a week, 8 hours per day, for 48 weeks = 1,152 hours. Claim: 1,152 × $0.70 = $806.40.
Actual Cost Method
You calculate the actual additional costs of working from home based on records of all expenses. This requires:
- Keeping all receipts, bills, and invoices
- Working out the work-related portion (e.g. by floor area or hours used)
- Apportioning between work and personal use
This method can yield a higher deduction but requires significantly more record keeping. You'll need a dedicated home office space to use the floor area method.
What You Can Claim
Can Claim
- Electricity for heating/cooling/lighting
- Internet and data usage
- Mobile and home phone calls
- Computer consumables (printer ink, paper)
- Stationery
- Home office furniture (desk, chair)
- Computers, monitors, and equipment
- Repairs to home office equipment
- Cleaning (dedicated office only)
Cannot Claim
- Rent or mortgage interest
- Council rates
- Home insurance
- Coffee, tea, milk (unless in a corporate office)
- Items provided by your employer
- Children's education costs
- General household items
- Time spent not actually working
Record Keeping Requirements
The ATO is strict about records. You must keep:
- A record of hours worked from home for the entire income year (e.g. timesheets, rosters, or a diary).
- Receipts or evidence for any items you claim separately (e.g. desk, computer).
- Phone bills showing work-related calls if claiming actual phone costs.
- Records must be kept for 5 years from the date you lodge your return.
The ATO has confirmed: "You can't just provide an estimate. You must have a record of the total number of hours you worked from home."
Our free WFH hours tracker generates a complete timesheet record with daily logs for every financial year, with PDF export for audit readiness.
$1,000 Instant Asset Write-Off
From the 2025–26 financial year, the government has proposed allowing small businesses and individuals to instantly deduct assets costing up to $1,000 rather than depreciating them over several years. This means if you buy a desk for $800, you may be able to claim the full amount immediately.
This applies to individual items, not total spend. Check the latest advice at ato.gov.au before making claims.
Frequently Asked Questions
How many hours do I need to work from home to claim deductions?
There is no minimum threshold. You can claim for any hours you genuinely work from home, even one day per week. The key is keeping a record of every hour.
Can I claim if I only work from home sometimes?
Yes. Hybrid workers can claim for the days they're at home. Use your WFH diary to track which days were home days vs office days.
What counts as "working from home"?
Performing your employment duties at home. Checking emails or taking occasional calls from home generally does not count — you must be doing substantive work.
Is the fixed rate or actual cost method better?
The fixed rate method is simpler and requires fewer records. The actual cost method may yield a higher deduction if your expenses are high, but the record keeping burden is much greater. Most people use the fixed rate method.
Do I need a dedicated home office to claim?
No — not for the fixed rate method. You can work from your kitchen table or lounge. A dedicated office is only needed if you want to claim occupancy expenses (rent, mortgage interest, rates) under the actual cost method.
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