What Are WFH Tax Deductions?
If you worked from home during FY2025–26, you may be able to claim a deduction for the additional costs you incurred. The ATO offers two methods:
Method 1: Fixed Rate Method (70¢/hour)
From 1 July 2022, the ATO revised the fixed rate to 70 cents per hour. This covers:
- Electricity and gas for heating/cooling and lighting
- Internet expenses
- Stationery and computer consumables
What it does NOT cover:
- Decline in value (depreciation) of home office equipment — you claim this separately
- Occupancy costs (rent, mortgage interest) — cannot be claimed unless your home is a place of business
How to Calculate
WFH Deduction = Total WFH hours × $0.70
Example: If you worked 38 hours/week × 48 weeks = 1,824 hours × $0.70 = $1,276.80 deduction
Records you need:
- A timesheet, roster, or diary showing when you worked from home
- You no longer need a dedicated home office area
Method 2: Actual Cost Method
This method lets you claim the actual work-related portion of:
- Electricity/gas: Based on the floor area ratio of your home office × energy usage
- Internet: Work-related percentage of your total bill
- Phone: Work-related call/data usage
- Office furniture: Decline in value (depreciation) over effective life
- Computer/laptop: Depreciation at 33.3%/year (3-year effective life)
- Stationery and printer cartridges: Full cost if exclusively for work
Records you need:
- Four weeks of representative usage records (updated every year)
- Receipts and bills for all expenses claimed
Which Method Gives the Bigger Deduction?
It depends on your situation. As a rough guide:
| Hours/week from home | Fixed Rate (annual) | Typical Actual Cost |
|---|---|---|
| 20 hrs/week (48 wks) | $672 | $400–$700 |
| 38 hrs/week (48 wks) | $1,277 | $800–$1,400 |
| 40 hrs/week (52 wks) | $1,456 | $900–$1,600 |
High internet usage, expensive equipment, or a large home office often makes the actual cost method more valuable.
AusTax AI automatically compares both methods and applies whichever is higher for you.
Common Mistakes to Avoid
Frequently Asked Questions
Can I claim WFH if I sometimes go into the office?
Yes. You claim for the hours you actually worked from home. Keep accurate records of each day.
I work in a shared household — can I still claim?
Yes, as long as you were actually working (not just available to work) from a specific area of the home.
Can I claim my rent or mortgage as a WFH deduction?
Generally no, unless your home is registered as a place of business with the ATO. Occupancy expenses are disallowed for most employees.
*This guide provides general information based on ATO guidelines for FY2025–26. For advice specific to your situation, consult a registered Tax Agent.*
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*Disclaimer: This is general information only and does not constitute personal tax advice. Consult a registered tax agent for advice tailored to your specific situation. Always verify against the latest ATO guidelines at ato.gov.au.*\n\n