Millions of Australians now work from home at least part of the week, and the running costs that come with it — power, internet, phone — are tax deductible. This guide explains how the deduction works, the two methods the ATO allows, what each one covers, and the records you'll need to claim it without trouble.
What you can actually claim
You can claim the additional running costs you incur because you work from home. That's the extra electricity, gas, internet, phone, stationery and consumables that come from doing your job at home, plus the decline in value of equipment like a desk, chair or laptop. You can't claim costs your employer reimburses, and as an employee you generally can't claim rent, mortgage interest, rates or home insurance.
There are two ways to work out the running-cost part: the fixed rate method and the actual cost method. You pick whichever suits you, as long as you keep the right records.
The fixed rate method (the simple one)
The fixed rate method lets you claim a set amount for every hour you work from home. For the 2024–25 year that rate is 70 cents per hour (it was 67 cents for 2022–23 and 2023–24). That one rate bundles together:
- Electricity and gas for heating, cooling and lighting
- Home and mobile internet and data
- Home and mobile phone usage
- Stationery and computer consumables
Because those costs are already inside the rate, you can't also claim them separately — no claiming your full phone or internet bill on top. The trade-off for that simplicity is that you only need one running total: your hours.
| Income year | Fixed rate |
|---|---|
| 2024–25 | 70 cents per hour |
| 2023–24 | 67 cents per hour |
| 2022–23 | 67 cents per hour |
What you can claim on top of the fixed rate
The fixed rate doesn't cover the bigger gear you use for work. You can separately claim the decline in value (depreciation) of equipment like a desk, office chair, laptop, monitor or printer, along with repairs and maintenance:
- Items that cost $300 or less can usually be claimed in full in the year you buy them.
- More expensive items are depreciated over their effective life, claiming a portion each year.
- If you use the item for both work and private purposes, you claim only the work-related percentage.
The actual cost method
The actual cost method skips the per-hour rate and instead claims the real work-related portion of each expense. You work out, for every cost, how much relates to work — for example the percentage of your home internet used for your job, or the running cost of your home office based on its floor area and the hours used. It can produce a bigger deduction if you have high bills or a dedicated office, but it demands detailed records and a reasonable basis for every apportionment.
The records you must keep
This is where most claims come unstuck. To use the fixed rate method for 2024–25 you need:
- A record of the total actual hours you worked from home across the whole year — a timesheet, roster, diary or similar. Since 1 July 2024 an estimate or a "representative four-week period" is no longer accepted.
- At least one bill for each running cost the rate covers, to show you actually incurred it — for example an electricity bill and an internet bill.
- Records for any equipment you depreciate separately (receipts and how you worked out the work-related use).
The single biggest change in recent years is that hours must now be a real, contemporaneous record. The easiest habit is to log your work-from-home hours as you go, rather than trying to reconstruct them at tax time.
A quick worked example
Mia works from home three days a week — about 22 hours — for 46 weeks of the 2024–25 year, and earns $85,000:
If Mia also bought a $250 desk used only for work, she could claim the full $250 on top, lifting her deduction to around $958.
The bottom line
For most employees the fixed rate method is the easy choice: track your hours, keep a bill for each running cost, claim 70 cents an hour, and add any equipment separately. Keep a real hours log as you go — that single habit is what makes the claim stick. When you're ready to see the numbers, the work-from-home calculator does the arithmetic for you.