TL;DR – What You Need to Know
- You can claim working from home expenses if you did genuine work from home and incurred additional costs.
- Two methods available: Fixed rate (70 cents per hour) or Actual costs.
- Fixed rate is simpler for most people. You need a record of your actual hours worked from home.
- Actual costs can give a bigger deduction but requires more record-keeping and usually a dedicated workspace.
- Keep good records — this is a key ATO focus area in 2026.
- Our checklist will help you choose the right method and gather the right documents.
👉 Complete the Growthwise 2026 Tax Return Checklist
Introduction
Working from home is now normal for many people, but the ATO’s rules are quite specific. There’s no longer a super-simplified COVID-era shortcut. What you can claim depends on which method you choose and whether you’ve kept proper records.
Here’s exactly how it works for the 2025–26 tax year.
What Can You Actually Claim?
If your job requires you to work from home, you can generally claim the work-related portion of:
- Heating, cooling and lighting for the area you work in
- Internet and mobile phone (work-related portion only)
- Stationery and computer consumables
- Equipment (computers, monitors, office furniture) — depreciated if over $300
You've always been able to claim these things the ATO just gives you two ways to calculate the actual deduction.
Before claiming anything, you must meet these three tests:
- You’re doing genuine work from home (not just occasionally checking emails)
- You’re actually incurring additional costs because of working from home
- You have records to support your claim
The Two Methods
Fixed Rate Method – 70 cents per hour
The simpler of the two options. You claim 70 cents for every hour you worked from home during the full income year.
This rate covers internet, phone, lighting, heating, cooling, stationery and consumables. You cannot claim these expenses separately on top.
You can still claim depreciation on equipment (e.g. laptop, monitor, desk) separately.
What you need:
- A record of your actual hours worked from home for the whole year (timesheet, diary, roster, or the ATO app). Rough estimates are not accepted.
- At least one bill or receipt showing you incurred the expenses.
Example – Sarah (Fixed Rate)
Sarah works from home three days a week. She keeps a simple timesheet and calculates she worked 850 hours from home during the year.
Claim = 850 × $0.70 = $595
She doesn’t need to calculate her actual electricity or internet bills — the 70 cent rate covers it. She also claims depreciation on her monitor separately.
Actual Cost Method (More work, potentially bigger deduction)
This method lets you claim your real additional expenses. To use this method, you must have a dedicated home office area. Then you can claim the actual cost of:
- Electricity and gas (based on actual usage)
- Internet and phone (work-related percentage)
- Stationery and consumables
- Depreciation on furniture and equipment
You’ll need a 4-week representative diary to work out your patterns, plus receipts and calculations for everything you are claiming.
Example – Michael (Actual Cost)
Michael works from home full-time in a dedicated office. He keeps detailed records and calculates his actual additional running costs (mainly electricity for air conditioning) came to $1,240 for the year. He also depreciates his office chair and monitor.
Because his real costs are much higher than the fixed rate would allow, he uses the actual cost method and claims $1,240.
Which Method Should You Use?
| Your Situation | Recommended Method | Reason |
|---|---|---|
| Work from home a few days a week | Fixed rate (70¢) | Simpler, good enough for most |
| Work from home most or all of the time | Actual cost | Usually gives a higher deduction |
| Want minimum paperwork | Fixed rate | Much less record-keeping |
| Have high electricity or equipment costs | Actual cost | Can claim real expenses |
| Don’t have good records of hours worked | Fixed rate (if possible) | Still need hours, but easier overall |
When you complete our checklist, we’ll ask about your hours and record-keeping so we can guide you on the best approach.
When you complete our checklist, we’ll ask about your hours and record-keeping so we can guide you on the best approach.
What You Can’t Claim
- Tea, coffee, milk and other consumables you would normally get at work
- Anything your employer has reimbursed
- General household items that aren't specifically work-related
- Rent or mortgage interest (unless you run a business from home and meet strict rules)
Common Mistakes & What the ATO Is Watching
The ATO is paying particular attention to working from home claims in 2025–26. Common issues we see include:
- Using rough estimates instead of actual recorded hours
- Claiming the fixed rate and trying to claim extra running costs on top
- Not keeping any records at all
- Claiming occupancy expenses without qualifying
Good records are the best protection.
The $1,000 Standard Deduction (Coming in 2027)
From the 2027 tax return (i.e. for the year starting 1 July 2026), the government is introducing a $1,000 standard deduction for work-related expenses. This won't apply to your 2026 return — the 2026 year is still under the current rules, including the 70 cents per hour WFH rate.
For most people with genuine WFH expenses, keeping records and claiming the actual amount will give you more than $1,000 anyway. We'll cover how the standard deduction works in detail when it applies.
Ready to get your return sorted?
If you're all set, head over to the Growthwise 2026 Tax Return Checklist and work through it from your couch.
Got more questions? Check out our FAQ page for how everything works at Growthwise, or see our guide on what else you can claim as an employee.
