Content updated 2 October 2026
Originally published 14 March 2023 · About Bradley Stewart
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Working from home does not automatically create a tax deduction. You need to incur additional eligible expenses while doing your work and keep evidence supporting your claim. For employees preparing a 2025–26 return, the two methods are the fixed rate method and the actual cost method. This guide updates our original 2023 article.
What is the current fixed rate?
The ATO’s published fixed rate is 70 cents per hour from 1 July 2024, including the 2025–26 income year. The 67-cent rate applies to 2022–23 and 2023–24. Check the rate for the year you are claiming in ATO Practical Compliance Guideline PCG 2023/1.
The fixed rate covers energy, phone, internet, stationery and computer consumables. Do not claim those expenses again separately, including work phone use outside the home. Eligible work-related decline in value of equipment can be claimed separately with supporting records.
What records do you need?
- A record of your actual hours worked from home throughout the income year, kept as you work—not an annual estimate based on a sample month.
- Evidence for each covered expense you incur: an energy, phone or internet bill, and a receipt for stationery or consumables where relevant.
- Purchase records and evidence of work use for equipment claimed separately.
A dedicated home office is not required for the fixed rate method. Each person sharing a home must meet the conditions for their own claim. See the record requirements in PCG 2023/1.
When might actual costs be appropriate?
The actual cost method uses the eligible work-related portion of expenses you incur. It requires evidence of costs and a reasonable calculation separating private use. Comparing methods starts with the records you actually have, rather than choosing the largest deduction. The ATO’s working-from-home guidance explains both methods.
Common mistakes
A deduction reduces taxable income; it is not a dollar-for-dollar refund. You cannot claim employer-provided items, reimbursed costs or ordinary household refreshments. Home-business and occupancy expenses have separate rules and should not be treated as ordinary employee running expenses.
Prepare for your tax appointment
Gather your hours log, expense evidence, equipment receipts and reimbursement details. Our Perth team can discuss the appropriate treatment as part of your accounting and tax work. Contact Stewart Private Accounting.
General information for Australian taxpayers, current at the update date. Your circumstances and the relevant income year determine the claim available.
