Working From Home Tax Deductions Australia (2026 Guide)
Over the past few years, working from home has become common for many Australians. Whether you work remotely full time or occasionally from home, you may be entitled to claim certain home office expenses in your tax return.
However, the rules around working from home deductions can be confusing. Many people either miss deductions or claim expenses incorrectly.
This guide explains what you can claim, how the ATO methods work, and the records you need to keep.
Who Can Claim Working From Home Expenses?
You may be able to claim working from home expenses if you perform your employment duties from home and incur additional running costs as a result.
This includes employees who:
regularly work from home
occasionally work from home
work remotely part of the week
However, you must actually incur extra expenses due to working from home to claim a deduction.
The ATO Fixed Rate Method
The most common way to claim working from home expenses is using the ATO fixed rate method.
This method allows you to claim a set amount per hour worked from home.
The rate is designed to cover expenses such as:
electricity and gas
internet usage
mobile phone usage
computer consumables
stationery
To use this method, you must keep a record of the hours you work from home.
Example
If you worked from home for 600 hours during the year:
600 hours × ATO fixed rate
= your working from home deductionThis method is simple and widely used by employees.
Additional Expenses You May Claim
Even when using the fixed rate method, you may still claim certain items separately.
These include:
Office furniture
Items such as desks, office chairs, and bookcases may be deductible if purchased for work purposes.
Large purchases may need to be claimed over time through depreciation.
Computer equipment
Computers, monitors, keyboards, and other technology used for work may also be deductible based on the work-related portion of use.
For example, if your computer is used 70% for work and 30% for personal use, only the work-related portion may be claimed.
Home Office Running Costs
If you work from home frequently, you may incur additional running costs such as:
electricity for lighting and computer equipment
heating or cooling
increased internet usage
These costs are partially covered by the ATO fixed rate method.
What You Cannot Claim
There are also several expenses that generally cannot be claimed when working from home.
These include:
rent or mortgage interest (for employees)
home insurance
general household expenses
childcare expenses
These costs are considered private expenses rather than work-related deductions.
Record Keeping Requirements
The ATO requires proper records to support your working from home claim.
These records may include:
a diary or timesheet showing hours worked from home
receipts for equipment purchases
internet or phone bills
purchase invoices for office furniture
Keeping digital copies of receipts throughout the year can make tax time significantly easier.
Common Mistakes When Claiming Home Office Expenses
Many taxpayers make mistakes when claiming home office deductions.
Some of the most common include:
Claiming 100% work usage
Unless the equipment is used exclusively for work, only the work-related portion can be claimed.
Claiming household costs
Expenses such as rent, mortgage interest, and groceries are generally private expenses and cannot be claimed by employees.
Not keeping records
Without records, the ATO may deny deductions during a review.
When It Helps to Use a Tax Agent
Working from home deductions are one of the most common areas where mistakes occur.
A registered tax agent can help ensure your deductions are calculated correctly and that your claims meet ATO requirements.
Professional advice may also help identify additional deductions you may not be aware of.
Need Help With Your Tax Return?
Understanding tax deductions can be confusing, particularly if you work remotely or have multiple sources of income.
If you need help preparing your tax return or want to ensure you are claiming everything you are entitled to, professional tax advice can help simplify the process.