Work From Home Deduction Calculator
Compare the ATO fixed rate method (67c/hr) with the actual cost method for the 2025-26 financial year. Find which approach gives you the bigger tax deduction.
Work From Home Hours
Total hours: 1,680 hours/year
Fixed Rate Method
67 cents per hour worked from home. Covers electricity, gas, phone, internet, stationery, and computer consumables.
Actual Cost Method
Calculate the exact work-related portion of each expense. Requires detailed records and receipts.
Comparison Summary
Actual Cost Method is better by $583.63
The actual cost method gives you a larger deduction, but requires detailed records and receipts for all expenses claimed.
Understanding Work From Home Tax Deductions in Australia
If you work from home in Australia, you can claim a tax deduction for the additional expenses you incur. The ATO provides two methods for calculating your work from home deduction: the fixed rate method and the actual cost method.
Fixed Rate Method (67 cents per hour)
From 1 July 2022, the revised fixed rate is 67 cents per hour worked from home. This rate covers the cost of electricity, gas, phone and internet usage, stationery, and computer consumables. You can still claim the decline in value of office furniture and technology (like desks, chairs, and monitors) separately. To use this method, you need a record of all hours worked from home during the income year, such as timesheets or a diary.
Actual Cost Method
The actual cost method requires you to calculate the exact work-related portion of each expense. For electricity, this is typically based on the floor area of your home office and the hours you work from home. For internet and phone, you calculate the work-related percentage of usage. This method may result in a higher deduction if your expenses are significant, but it requires more detailed records including receipts for all expenses and a reasonable basis for your calculations.
Record-Keeping Requirements
Regardless of which method you choose, the ATO requires you to keep records. For the fixed rate method, you need a record of hours worked from home for the entire year. For the actual cost method, you need receipts for all expenses, a record of how you calculated the work-related portion, and evidence of your working arrangements. All calculations in this tool run entirely in your browser -- no data is sent to any server.
Related Tools
Frequently Asked Questions
What is the ATO fixed rate for working from home in 2025-26?
For the 2025-26 financial year, the ATO fixed rate method allows you to claim 67 cents per hour worked from home. This rate covers electricity, gas, phone, internet, stationery, and computer consumables. You can claim office furniture and equipment depreciation separately on top of the fixed rate.
What is the difference between the fixed rate and actual cost methods?
The fixed rate method uses a flat 67 cents per hour to cover running expenses (electricity, gas, phone, internet, stationery, computer consumables). The actual cost method requires you to calculate the precise work-related portion of each expense. The actual cost method may give a larger deduction if your expenses are high, but requires more detailed records and receipts.
What records do I need to keep for WFH deductions?
For the fixed rate method, you need a record of hours worked from home (e.g., timesheets, rosters, diary) for the entire income year. For the actual cost method, you need receipts for all expenses, a method for calculating the work-related portion (e.g., floor area for electricity, usage logs for internet), and records showing how you determined each percentage.
Can I claim office furniture under the fixed rate method?
Yes. The fixed rate of 67 cents per hour does NOT cover office furniture, equipment, or technology (like desks, chairs, monitors, or computers). You can claim depreciation on these items separately in addition to the fixed rate. Items costing $300 or less can be claimed as an immediate deduction, while items over $300 must be depreciated over their effective life.