What is the ATO working from home rate for 2025–26?

The ATO fixed rate method for working from home is 67 cents per hour in 2025–26. This covers energy costs (electricity, gas), phone and internet expenses, stationery and computer consumables. You must keep a record of all hours worked from home — typically via a timesheet, diary or roster.

What's the difference between the fixed rate and actual cost methods?

The fixed rate method (67¢/hr) is simpler — multiply hours worked from home by 67¢. No need to calculate individual costs. The actual cost method requires you to calculate the exact running costs of your home office — electricity usage, internet proportion, phone calls, depreciation on home office furniture and equipment. You need receipts and usage records for the actual cost method. Most people find the fixed rate method easier and claim a similar or better deduction.

How many hours can I claim for working from home?

You can only claim hours you actually worked from home — not time spent on personal activities, breaks or lunch. You need a record (timesheet, diary entries, or roster) covering the entire period. The ATO expects at least one representative 4-week diary each income year to substantiate your pattern. You cannot claim for time spent commuting, or for hours when your children are doing online learning and you're just nearby.

Do I need a dedicated home office to claim WFH expenses?

No, you do not need a dedicated home office. You can claim the fixed rate method even if you work from your kitchen table or sofa. However, if you use the actual cost method and want to claim occupancy expenses (rates, mortgage interest, rent), you typically need a dedicated room used solely for work. Most employees claim the fixed rate method and don't need a separate room.

Working From Home Calculator Australia — ATO WFH Deduction 2025–26

🏠 WFH Tax Deduction Calculator

Calculation Method

Hours worked from home per week

Weeks worked from home per year

Actual additional running costs ($/year)

Your marginal tax rate (%)

Your Annual WFH Deduction

Weekly deduction

Fortnightly deduction

Monthly deduction

Total hours per year

0 hrs

Estimated tax refund boost

Method used

Fixed rate

How the ATO Working From Home Deduction Works in 2025–26

The Australian Tax Office (ATO) allows you to claim a deduction for additional expenses you incur when working from home. For the 2025–26 financial year, there are two methods available: the fixed rate method (67 cents per work hour) and the actual cost method.

The fixed rate method is the most popular choice — it's straightforward and covers most running expenses in a single rate. The 67¢ rate covers energy (electricity and gas), phone usage, internet costs, stationery, and computer consumables. You simply multiply your total hours worked from home by 67 cents, and that's your deduction.

With the actual cost method, you calculate each expense individually — how much extra electricity you used, what percentage of your internet bill relates to work, depreciation on your computer and office furniture, and any other work-related running costs. This method requires receipts, bills, and a clear log of work vs personal usage.

Who Can Claim Working From Home Expenses?

To claim a WFH deduction, you must be working from home as part of your employment duties — not just checking emails occasionally. You need to genuinely perform work tasks from home on a regular basis. The ATO expects you to keep a record of the hours you worked from home (a timesheet, diary, or roster covering a representative 4-week period each year).

If you're an employee working under a hybrid arrangement (e.g. 2 days in the office, 3 days at home), you can claim for the days you work from home. The key is that the expense must be directly related to your work, and you must have a record to prove it.

Fixed Rate Method vs Actual Cost Method — Which Is Better?

Factor	Fixed Rate (67¢/hr)	Actual Cost
Ease of use	⭐⭐⭐⭐⭐ Very simple	⭐⭐ Requires record-keeping
Records needed	Hours worked (timesheet/diary)	Hours + receipts + bills + usage log
What it covers	Energy, phone, internet, stationery, consumables	Same items + depreciation on furniture/equipment
Best for	Most employees working from home 1–5 days/week	People with very high home office running costs or significant equipment depreciation
Maximum claim	Unlimited (based on actual hours)	Unlimited but must be substantiated
ATO audit risk	Lower (simpler, harder to get wrong)	Higher (more items to substantiate)

Example WFH Deduction Calculations

Scenario 1: Sarah works from home 3 days per week, 8 hours per day = 24 hours/week. She works 48 weeks per year. Total hours = 24 × 48 = 1,152 hours. Using the fixed rate method: 1,152 × $0.67 = $771.84 annual deduction. At Sarah's 30% marginal tax rate, this saves her $231.55 in tax.

Scenario 2: Mark works from home full-time, 38 hours/week, 48 weeks/year = 1,824 hours. Using the fixed rate method: 1,824 × $0.67 = $1,222.08 annual deduction. At Mark's 37% marginal tax rate, this saves him $452.17 in tax.

Scenario 3: Emma works from home 2 days per week, 7.6 hours/day = 15.2 hours/week. Over 48 weeks = 729.6 hours. Fixed rate deduction: 729.6 × $0.67 = $488.83. At her 16% marginal rate, this saves $78.21 in tax.

Frequently Asked Questions

Can I claim the working from home deduction if my employer provides equipment?▾

Yes, you can still claim the fixed rate deduction if your employer provides equipment like a laptop, monitor or phone. The fixed rate method covers running costs (electricity, internet, phone usage, stationery) which you still incur even if equipment is supplied. However, if your employer reimburses you for all your home office expenses (e.g. pays your internet bill directly), you cannot also claim those costs as a deduction.

Do I need a dedicated home office to claim the fixed rate?▾

No. The ATO fixed rate method does not require a dedicated room. You can work from your kitchen table, lounge room, or a shared study — as long as you are genuinely working, the 67¢/hr rate applies. For the actual cost method, you typically need a dedicated workspace to reasonably apportion costs like electricity, internet and depreciation. But for the fixed rate, no separate room is needed.

What records do I need to keep for the ATO?▾

For the fixed rate method, you need: (1) a record of the hours you worked from home — a timesheet, diary, or roster covering the full year, with at least one representative 4-week diary period; (2) evidence that you incurred the expense (you don't need individual receipts for the fixed rate because the 67¢ covers running costs). For the actual cost method, you need all receipts and bills plus a diary or log showing the work-related proportion of each expense. The ATO recommends the myDeductions tool in the ATO app for easy record-keeping.

Can I claim occupancy costs (rent, mortgage interest, rates) for working from home?▾

Generally, no — not if you are an employee. Occupancy expenses like rent, mortgage interest, council rates and home insurance cannot be claimed by employees working from home. These are only claimable if you are running a business from home (sole trader or business) with a dedicated home office used exclusively for business. For employees, the ATO strictly limits WFH claims to running costs: electricity, gas, phone, internet, stationery, and depreciation of home office equipment.

Does the working from home deduction affect my capital gains tax when I sell my home?▾

Using the fixed rate method does NOT affect your main residence capital gains tax (CGT) exemption. However, if you claim occupancy expenses (mortgage interest, rates, rent) under the actual cost method as a business owner, a portion of your home may lose its CGT main residence exemption. Since most employees cannot claim occupancy costs anyway, this is rarely an issue. The fixed rate method is safe in this regard.

This calculator provides an estimate only based on ATO 2025–26 rates for the working from home deduction. Individual circumstances vary. The ATO may update rates and rules. Consult a registered tax agent for personalised advice on your tax return.

Related Tools

Income Tax Calculator Australia — Estimate your 2025–26 tax return
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