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. The ATO offers two methods: the fixed rate method (70 cents per hour, current from 1 July 2023 under PCG 2023/1) 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 (70 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.
Calculate it yourself
Open calculator →Related Terms
Fixed Rate Method
A simplified method for claiming work from home expenses at 70 cents per hour, covering a range of running expenses.
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.
Uniform & Clothing Deductions
Tax deductions for buying, cleaning, and maintaining work-related uniforms, protective clothing, and occupation-specific clothing.
Self-Education Expenses
Deductions for education expenses that are directly related to your current employment or likely to increase your income in your current role.