Working from home tax deductions cover additional running expenses you incur while performing your employment duties at home. The claim must relate to earning your income, exclude private use and be supported by the records required for the calculation method.
Can you claim working from home expenses?
You need to satisfy all three conditions:
- You worked from home to perform employment duties, rather than only checking an occasional email or taking a call.
- You incurred additional running expenses because you worked from home.
- You kept records showing the hours worked and the expenses incurred.
If an expense has both work and private use, only the income-producing portion can be claimed. An amount reimbursed by your employer cannot be claimed.
Fixed rate or actual cost method
For 2025-26 and 2026-27, multiply the actual hours worked from home by $0.70. The rate covers energy, internet and data, phone usage, stationery and computer consumables.
Calculate the additional expenses actually incurred because you worked from home, then apportion each expense for its work-related use.
Choose the method that applies to your records and circumstances. You cannot use the fixed rate and also claim a separate deduction for an expense already included in that rate.
What the 70 cent rate covers
The 70 cent rate applying from 1 July 2024 includes:
- electricity and gas for heating, cooling and lighting
- home and mobile internet or data
- mobile and home phone usage
- stationery and computer consumables
Eligible costs outside the rate may be claimed separately. These can include the work-related decline in value of a computer, desk or other depreciating asset, repairs and maintenance, and cleaning of a separate home office. Each separate claim needs its own calculation and records.
Records needed for working from home tax deductions
For the fixed rate method, keep:
- a record of the actual hours worked from home for the full income year
- at least one record for each type of expense included in the rate that you incurred, such as an electricity or internet bill
- records and calculations for depreciating assets or other expenses claimed separately
The actual cost method requires records of the expense and a reasonable calculation of the work-related portion. The evidence must show both that you incurred the cost and how the deductible amount was worked out.
Working from home costs you cannot claim
- coffee, tea, milk and other general household items
- equipment or subscriptions for your children's education
- items provided by your employer
- expenses reimbursed by your employer
- the private portion of any mixed-use expense
Occupancy expenses such as rent or mortgage interest are only deductible in limited circumstances. Working at home does not by itself make these costs deductible.
Working from home deduction calculation
This example uses the 70 cent rate applying to both 2025-26 and 2026-27. Any eligible depreciating asset claimed separately would be calculated and added after its private-use portion is removed.
Working from home tax deduction FAQs
What is the working from home fixed rate for 2025-26 and 2026-27?
The fixed rate is 70 cents for each actual hour worked from home in both income years because the ATO guideline sets this rate from 1 July 2024.
What records do I need for a working from home deduction?
For the fixed rate method, keep a record of every hour worked from home for the full income year and at least one record for each type of expense included in the rate that you incurred.
Can I claim internet separately when using the fixed rate?
No. Internet and data expenses are included in the fixed rate and cannot also be claimed separately under that method.
Can I claim rent or mortgage interest for working from home?
Usually not. Occupancy expenses are only deductible in limited circumstances. Simply working from home does not make rent or mortgage interest deductible.