Fixed Rate Method
A simplified method for claiming work from home expenses at 70 cents per hour, covering a range of running expenses.
The fixed rate method allows you to claim work from home running expenses at a flat rate of 70 cents per hour worked from home. The rate was 67 cents per hour from 1 July 2022 (replacing the previous 52 cents per hour rate), then revised up to 70 cents per hour from 1 July 2024 (the 2024-25 income year) under PCG 2023/1 — the current rate. It covers: electricity and gas for heating/cooling and lighting, phone and internet usage, stationery and computer consumables. It does not cover the decline in value of furniture, equipment, or technology, which must be claimed separately.
To use this method, you need to keep a record of the actual hours you worked from home during the income year. The ATO accepts timesheets, rosters, time-tracking apps or a diary, but the record must cover the actual hours for the entire income year — since 1 March 2023 an estimate, including a representative 4-week period extrapolated to the full year, is not accepted. You also need to have incurred additional running expenses as a result of working from home — if your employer pays for all your expenses, you can't claim.
In addition to the 70 cents per hour, you can separately claim the work-related portion of: the decline in value (depreciation) of office furniture (desk, chair, bookshelf), technology items (computer, monitor, keyboard, headset), and the cost of repairs to this equipment. For items costing $300 or less, you can claim an immediate deduction. For items over $300, you claim depreciation over the item's effective life.
How it works
The fixed rate method lets you claim work-from-home running expenses at a flat 70 cents for every hour you worked from home, a rate that has changed several times: it was 52 cents an hour up to 2021-22, 67 cents for the 2022-23 and 2023-24 income years, and 70 cents from 2024-25 onwards under PCG 2023/1. That single rate is meant to cover electricity and gas for heating, cooling and lighting, phone and internet usage, and stationery and computer consumables together.
In practice you need a record of the actual hours worked from home for the entire income year — a timesheet, roster, time-tracking app or diary all qualify, and it has to be kept as you go rather than reconstructed afterwards. Since 1 March 2023 an estimate will not be accepted, and neither will a representative four-week sample scaled up across the year, which is what the older 52-cent method allowed. You also need to have actually incurred additional running expenses as a result of working from home, not just have the option to.
The fixed rate does not cover the decline in value of furniture, equipment, or technology used for work — desks, chairs, monitors, and computers are claimed separately. For those items, anything costing $300 or less can be deducted immediately in full, while anything over $300 is depreciated over its effective life instead of claimed all at once, which is where many people mistakenly try to fold an equipment purchase into the hourly rate.
Example: a full-year record of hours
An employee works from home two days a week and logs the start and finish time of each of those days in a calendar as they happen. Across the income year the log adds up to 1,824 actual hours worked from home.
At 70 cents per hour, the fixed rate deduction is 1,824 × $0.70 = $1276.80. Had the same employee logged only four representative weeks and scaled that up, none of the estimated hours could be claimed. A $250 monitor bought for the home office that year is claimed separately as an immediate deduction, since it falls under the $300 threshold.
Calculate it yourself
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Work From Home Deductions
Tax deductions for expenses incurred when working from home, claimable using the fixed rate method or actual cost method.
Taxable Income
Your assessable income minus allowable deductions — the figure used to calculate your income tax.
Income Tax
Tax levied by the federal government on your taxable income, calculated using progressive tax brackets.
Instant Asset Write-Off
Allows eligible businesses to immediately deduct the full cost of eligible depreciating assets, rather than depreciating over time.