Work From Home Tax Deduction Calculator (FY2025–26)

Work From Home Tax Deductions in Australia: A Complete Guide (FY2025-26)

With millions of Australians working from home — either full-time, part-time, or on a hybrid basis — the work from home tax deduction is one of the most widely applicable deductions in the Australian tax system. Yet it remains one of the most misunderstood and under-claimed.

The ATO overhauled the WFH deduction rules in 2022-23, introducing a revised fixed rate of 67 cents per hour that replaced both the previous 52c rate and the shortcut method (80c/hr) that had been available during COVID. Understanding the current rules — and keeping the right records — is essential before lodging your return.

The 67c Fixed Rate: What It Covers and What It Doesn't

The 67c fixed rate covers all of the following in a single rate:

• Electricity and gas for heating, cooling, and lighting your workspace
• Internet expenses (the work-related portion)
• Phone expenses (the work-related portion)
• Stationery and computer consumables (paper, printer ink, etc.)

It does not cover:

• Depreciation on office furniture (desk, chair, shelving)
• Depreciation on computer equipment (laptop, monitor, keyboard, webcam)
• Occupancy costs (rent, mortgage interest) — these can only be claimed under the actual cost method
• Repairs and maintenance to the home office

Equipment depreciation is claimed separately under the work-related expenses section of your tax return. Items costing $300 or less can be claimed as an immediate deduction; more expensive items are depreciated over their effective life.

The Critical Record-Keeping Change from March 2023

The most important rule change that many people are unaware of: from 1 March 2023, the ATO requires a full year record of hours worked from home. You can no longer use a representative 4-week diary and extrapolate it.

Your record must cover the entire period of your WFH claim and show the actual hours you worked. Acceptable records include:

• A timesheet or electronic time-tracking log
• A diary or calendar with daily WFH hours
• An employer roster showing WFH days
• Timesheets lodged through your workplace system

If you don't have this record, you risk having your claim disallowed in an ATO audit. Start keeping records now if you haven't already — and for next year, consider using a simple spreadsheet or time-tracking app.

EOFY Checklist: Maximising Your WFH Deduction Before 30 June

1. Compile your hours record. Calculate total hours worked from home this financial year. Reconstruct from calendar events, email records, or workplace systems if you haven't been keeping a log.
2. List equipment purchased. Any work-related equipment bought this year (laptop, monitor, standing desk, webcam) can be claimed. Items under $300 are an instant deduction; items over $300 are depreciated.
3. Consider the actual cost method if you have a dedicated home office that takes up significant floor space. Compare both methods before choosing.
4. Keep all receipts. Utility bills, internet bills, and equipment receipts should be retained for 5 years in case of an audit.
5. Don't double-count. If you use the 67c fixed rate, you cannot also separately claim internet or phone expenses — they are already included in the rate.