How the working-from-home deduction works
If you work from home and incur extra running costs because of it, you can claim a tax deduction for those costs. A deduction isn't a refund of the full amount — it reduces your taxable income, so what you save is the deduction multiplied by your marginal tax rate. Claim a $672 deduction on a 32% marginal rate and you pay about $215 less tax.
The ATO gives you two ways to work it out: the fixed rate method and the actual cost method. This calculator uses the fixed rate method, which is simpler and what most employees choose.
The fixed rate method
You claim a set rate for every hour you work from home — 70 cents per hour for 2024–25 (it was 67 cents for 2022–23 and 2023–24). That single rate is designed to cover the everyday running costs of working from home:
- Electricity and gas (heating, cooling, lighting, running your devices)
- Home and mobile internet and data
- Home and mobile phone usage
- Stationery and computer consumables (paper, ink)
Because those costs are bundled into the rate, you can't claim any of them again separately on top of the fixed rate.
What you can claim on top
The fixed rate doesn't cover the decline in value (depreciation) of the bigger equipment you use for work — a desk, an office chair, a laptop or monitor — or repairs and maintenance on them. You can claim these separately, and you can add an estimate of them in the "other items" field above. Items costing $300 or less can usually be claimed in full in the year you buy them; more expensive items are depreciated over their effective life.
The records you must keep
From 1 July 2024 (the 2024–25 year), the ATO requires a record of the total actual hours you worked from home across the whole year — a timesheet, roster or diary. An estimate or a "typical week" no longer cuts it. You also need at least one bill for each running cost the rate covers (for example, one electricity bill and one internet bill) to show you actually incurred them.
Fixed rate vs actual cost method
The actual cost method lets you claim the real work-related portion of every expense, which can produce a larger deduction if you have high bills or a dedicated home office — but it needs detailed records and apportionment calculations for each cost. For most people the fixed rate method is simpler and close enough. You can work out both and use whichever is higher, as long as you keep the records to back it up.
Worked example: 20 hours a week
Sam works from home 20 hours a week for 48 weeks of the year, and earns $90,000 in 2024–25:
20 hrs/week from home on $90,000
If Sam also bought a $400 office chair used only for work, he could claim its decline in value separately, on top of the $672, increasing the deduction further.