Over the last few years, working from home has become a normal part of life for many Australians. Whether you’re logging in from your kitchen table or you’ve got a fully equipped home office, chances are you’re covering some of the costs of keeping that workspace running.
The good news is that some of those costs might be tax-deductible — but the rules around what you can and can’t claim are worth understanding before you start adding up receipts.
Understanding Work from Home Tax Deductions
If you’re an employee who regularly performs your work duties from home, you may be able to claim certain work from home expenses when it comes time to lodge your tax return. The Australian Taxation Office (ATO) allows you to claim additional costs you incur as a direct result of working from home — not personal expenses or anything that’s been reimbursed by your employer.
To qualify, you must genuinely be working from home to earn your income (not just occasionally checking emails), and you must have paid for the expense yourself.
Two Main Ways to Calculate Your Claim
There are two key methods for calculating your working from home tax deductions:
The Fixed Rate Method
From the 2025 financial year onwards, the ATO allows a fixed rate of 70 cents per hour worked from home; this covers everyday running costs like electricity, internet, phone use, and stationery. You’ll need to keep accurate records of your working hours (such as a diary or timesheet) to support your claim.
You can still claim separately for equipment you purchase for work (as in computers, printers, or office chairs) as long as you haven’t been reimbursed. Items under $300 can generally be claimed in full; more expensive items are claimed over time through depreciation.
The Actual Cost Method
If you prefer, you can calculate the real portion of your household expenses that relate to work (this method often requires more detailed record-keeping, but it can be worthwhile if your costs are higher than the fixed rate covers). It might include a percentage of electricity and gas, internet, phone, cleaning, and equipment depreciation.
Each method has its pros and cons, and the right one for you depends on how often you work from home, how much you spend, and how diligent you are with record-keeping.
What You Can and Can’t Claim
You can generally claim:
- Electricity and gas for heating, cooling and lighting your workspace
- Internet and phone usage directly related to your job
- Stationery, printer ink and other consumables
- Work-related cleaning costs for your home office
- Equipment purchases or depreciation
You can’t claim:
- Expenses your employer reimbursed you for
- Rent, mortgage interest or rates (unless you’re self-employed and your home is your principal place of business)
- Personal items not directly connected to earning your income
The key is keeping good records — both of your working hours and the money you’ve spent. Without evidence, even legitimate claims can be disallowed.
You may want to tyy our tax calculator here.
Making It Easier to Stay on Top of Your Finances
Understanding what you can claim (and how!) is an important part of being financially savvy. It’s not just about getting a bigger refund; it’s about knowing your entitlements and making informed financial decisions.
At Money101, we’re all about helping Australians build their financial literacy and confidence. Our engaging education programs and tools make it easier to understand the financial side of everyday life — from tax and superannuation to budgeting and retirement planning.
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