Claiming Work From Home (WFH) Deductions: What You Need to Know

If you work from home, you may be able to claim a deduction for your expenses. The Australian Taxation Office (ATO) offers two ways to claim your work-from-home costs:

✅ Fixed rate method
✅ Actual expenses method

We’ve broken down what each option involves so you can choose the right approach for you.

📅 Changes from 1 July 2022

Before 1 July 2022, you could use the shortcut method (80 cents per hour), but this method has now ended.

From 1 July 2022 onwards, you can:

• Keep claiming actual expenses; or

• Use the ATO’s updated fixed rate method under Practical Compliance Guideline (PCG) 2023/1.

The fixed rate per hour worked from home is:
💰 67 cents per hour for 2022–23 and 2023–24
💰 70 cents per hour from 1 July 2024

This rate was updated in April 2025.

🏡 What’s Included in the Fixed Rate?

The fixed rate covers your extra running costs for:
✔️ Home and mobile internet or data
✔️ Home and mobile phone use
✔️ Electricity and gas (heating, cooling, lighting)
✔️ Stationery and computer consumables

👉 If you use the fixed rate, you can’t claim these expenses separately.

However, you can still claim separately for things like:

• The decline in value of your computer, desk, or office chair

• Repairs or maintenance for these work-related assets

✅ Am I Eligible for the Fixed Rate Method?

To use the fixed rate, you must:

1. Be working from home

   • Doing real work that earns income (checking emails occasionally doesn’t count).

   • You don’t need a separate home office.

2. Incur extra running costs

   • You paid for these costs yourself (and weren’t reimbursed by your employer).

3. Keep good records

   • A record of actual hours worked from home for the whole year (like a diary or timesheet).

   • A document for each expense (such as a bill or invoice).

📝 How to Calculate Your Deduction

It’s simple:

1. Multiply your total hours worked from home by the fixed rate for the year.

2. That’s the amount you can claim for your running expenses.

➡️ You can’t claim extra deductions for electricity, internet, phone, or stationery if you’re using the fixed rate.

But you can claim separately for:

• Depreciation of computers, office equipment, and furniture

• Repairs and maintenance of these items

💡 Tip: If an item costs $300 or less, you can usually claim the full amount in the year you bought it.

💼 What If I Use the Actual Expenses Method?

Prefer to claim your actual costs? You’ll need to calculate the real work-related portion of expenses like:

• Electricity and gas

• Internet and phone use

• Depreciation of office furniture and equipment

• Stationery and consumables

• Cleaning costs for a dedicated home office

👉 Only the work-related portion of these costs can be claimed. You’ll need to keep detailed records and work out fair percentages.

❌ What You Can’t Claim

You can’t claim for:
🚫 Coffee, tea, or snacks
🚫 Items for your kids’ education (like iPads or desks)
🚫 Anything your employer provided or reimbursed

📣 Keep Good Records to Make Tax Time Easier

The ATO reminds all taxpayers to keep clear records of their hours worked from home and their expenses. Good habits during the year will save you time and stress when it’s time to lodge your tax return.

Need help working out your claim? Contact us today for friendly, expert advice.