Work From Home Deductions
Tax deductions for expenses incurred when working from home, claimable using the fixed rate method or actual cost method.
Work from home deductions allow employees and business operators to claim tax deductions for expenses incurred when working from home. From 1 July 2022, the ATO offers two methods: the fixed rate method (67 cents per hour) and the actual cost method. The shortcut method (80 cents per hour) that applied during COVID-19 is no longer available.
The fixed rate method (67 cents per hour) covers electricity, gas, phone, internet, stationery, and computer consumables. You can claim additional deductions for items not included in the rate, such as the decline in value of office furniture (desk, chair), technology (computer, monitor, printer), and cleaning costs for a dedicated home office. You must keep a record of actual hours worked from home (a timesheet, roster, diary, or similar).
The actual cost method requires you to calculate the actual proportion of each expense attributable to working from home. This involves metering energy usage or apportioning bills based on floor area and hours of use. While potentially resulting in a higher deduction, this method requires significantly more detailed records. You must keep receipts for all expenses and maintain records showing how you calculated the work-related portion. For most employees, the fixed rate method is simpler and provides a reasonable deduction.