Key facts
- Fixed rate, 2025-26
- 70c per work hour (the same as 2024-25)
- Fixed rate, 2022-23 and 2023-24
- 67c per work hour
- Covered by the fixed rate
- Energy, phone, internet, stationery and computer consumables
- Hours record
- Actual hours for the whole year, estimates not accepted
- Expense records
- At least one bill for each expense the rate covers
- Rent, mortgage interest, rates
- Generally not claimable by employees
- Keep records for
- 5 years from lodging your return, in most cases
Who can claim working from home expenses?
You can claim if you work from home to fulfil your employment duties, you incur extra running expenses because of it, and you keep the records the ATO asks for. Minimal tasks, such as occasionally checking emails or taking calls, do not count as working from home.
You can only claim the work share of an expense you also use privately. You can't claim general household items like tea, coffee or milk, items your employer provides, or costs your employer reimburses. A working from home allowance from your employer is income in your tax return.
The fixed rate method for 2025-26
The fixed rate for 2025-26 is 70 cents for each hour you work from home, the same as 2024-25. It covers energy for heating, cooling and lighting, internet and data, mobile and home phone use, and stationery and computer consumables. If you use this method, you can't claim those costs separately, including phone use on days you were not working from home.
You can claim some things on top of the fixed rate. These include the decline in value of work equipment and furniture, repairs to them, and an immediate deduction for items costing $300 or less that you use mainly for work. You don't need a dedicated home office to use the fixed rate.
Records are where claims fall over. You need a record of the actual hours you worked from home for the whole year, made at the time, such as a timesheet, roster or diary, and the ATO says an estimate is not acceptable. You also need at least one record of each expense the rate covers, such as one quarterly electricity bill.
Worked example: two days a week at home
Alex works from home two days a week, 8 hours a day, and records those hours in a diary. Over 46 working weeks in 2025-26, the diary shows 2 x 8 x 46 = 736 hours.
Alex's fixed rate claim is 736 x $0.70 = $515.20. Alex also bought a desk chair used only for work, and can claim its decline in value separately. Alex can't add a separate claim for the home internet or mobile phone, because the 70 cents covers them.
The actual cost method
The actual cost method claims the real additional costs of working from home. It can suit people with high energy or phone costs, or who want to claim all their work-related phone use, but it needs more work to support.
For hours, you need either a record of your actual hours for the whole year or a diary covering a continuous 4-week period that represents your usual pattern. For energy, you need your cost per unit from your bill, the power use per hour of what you run, and your total hours. For an itemised phone or internet bill, you work out your work use over a continuous 4-week period and apply that percentage to the year.
- Receipts and bills for each running expense
- Your hours record or representative 4-week diary
- Receipts for equipment and furniture, plus the work use percentage
- How you worked out each amount
Can you claim rent, mortgage interest or rates?
Generally not, if you are an employee. Occupancy expenses, such as rent, mortgage interest, council and water rates, land tax and house insurance, can only be claimed where part of your home has the character of a place of business. The ATO says you can't claim them if your employer provides you with a place to work.
Where they can be claimed, you need to show that your work needs a place of business, that your employer gives you no alternative place of business, and that the area is used exclusively or almost exclusively for work. Claiming occupancy expenses can reduce the main residence capital gains tax exemption on a home acquired after 20 September 1985. Claiming only running expenses has no capital gains tax effect.
When to get help
If you work from home a lot, it can be worth comparing the fixed rate and actual cost methods before you lodge. If you run a business from home or are thinking about occupancy expenses, get advice first because of the capital gains tax trade-off.
Acquire Strategic Accounting is a registered tax agent with offices in Victoria Point and Jimboomba. We can work through which method suits your records.
Related questions
Can I claim my phone and internet as well as the 70 cents per hour?
No. The fixed rate already covers phone and internet use. If you want to claim your actual work-related phone and internet costs, you need to use the actual cost method instead.
Can I estimate my working from home hours?
No. Under the fixed rate method you need a record of the actual hours you worked from home for the whole year, made at the time. The ATO says an estimate won't be accepted.
Do I need a dedicated home office?
Not for the fixed rate method. You can work at the kitchen table and still claim, as long as you meet the other conditions and keep the records. A dedicated area matters for occupancy expenses, which most employees can't claim.
Has the ATO set a fixed rate for 2026-27?
As at 31 October 2026, the ATO's fixed rate page lists rates only up to 2025-26. Keep recording your actual hours from 1 July 2026 so you are ready whatever rate applies.
Does a working from home allowance change my claim?
The allowance is assessable income, so it goes in your tax return. You can still claim eligible expenses you incurred, but not any your employer reimbursed.
Sources
General information only, current at 31 October 2026. It does not take your circumstances into account. Rates and thresholds change, so check with us or the ATO before you act.
