Working From Home in 2025-26? Here’s How to Claim It on Your Tax Return
Millions of Australians worked from home at some point during the 2025-26 financial year, and many are entitled to claim a deduction on their tax return as a result. The ATO’s fixed rate method makes the calculation straightforward — but there are record-keeping requirements that catch a lot of people out. Here is what you need to know before you lodge.
The 70-cent fixed rate method
The most widely used approach is the fixed rate method, which allows you to claim 70 cents for every hour you worked from home during the income year. The 70-cent rate is an all-in figure that covers the additional running costs of working from home, including electricity and gas for heating, cooling and lighting your workspace, internet and data expenses, mobile and home phone usage, and stationery and computer consumables such as printer ink and paper. You multiply the total number of hours you worked from home by 70 cents, and the result is your deduction — no need to calculate the actual cost of each individual expense.
The record-keeping requirement you cannot skip
The most important rule under the fixed rate method is that you must have a record of your actual hours worked from home for the entire income year. Estimates are not accepted by the ATO. Acceptable records include a timesheet, roster, diary, or similar document that shows your work-from-home hours on a consistent basis. App-based logs and calendar entries that note your start and end times also satisfy the requirement. If you did not keep a contemporaneous record throughout the year, you should reconstruct one as accurately as possible using whatever evidence you have — email timestamps, meeting invitations, remote access logs, and the like — before you lodge.
What you can still claim on top of the fixed rate
The 70-cent rate does not cover everything. You can still claim a separate deduction for the work-related portion of the decline in value, or depreciation, of assets you used for work — for example, your laptop or computer, office chair, desk, or bookshelves. To claim depreciation, you need a record of the date of purchase, the cost of the asset, and an estimate of how much of your use was work-related. One important point: if you use the fixed rate method, you cannot also claim internet or phone expenses separately, because those are already included in the 70-cent rate.
The actual cost method: an alternative for some
For people who work from home extensively — particularly those with a dedicated home office space — the actual cost method may produce a larger deduction. This involves calculating the real cost of each running expense and apportioning it between work and personal use. It requires more detailed records including receipts and usage logs, but can be worthwhile if your actual costs are meaningfully higher than what the fixed rate would cover. Speak with us if you are unsure which method is better for your situation.
Common mistakes that reduce your refund
The most frequent errors when claiming working from home deductions include relying on an estimate rather than actual hours, using the fixed rate method and then also claiming internet or phone costs separately (which double-counts those expenses), and forgetting to claim depreciation on work-related equipment as a separate item. Taking a little extra time to get your records in order before lodging can make a meaningful difference to your refund. The individual tax return deadline for most people who self-lodge is 31 October 2026.
If you worked from home during 2025-26 and are not sure which method gives you the best result — or you would like help getting your records together before lodging — get in touch with us. A well-prepared working from home claim can add up to a noticeably larger refund.
