Home Office Expenses — Australia Tax Rules

Claim working from home costs using the ATO's fixed rate method or actual cost method.

Claimable: Partially claimable · Tax authority: ATO

ATO Rules

• The ATO's revised fixed rate method (from 1 July 2022): 67 cents per hour worked from home.
• The 67c/hr rate covers electricity, phone, internet, stationery, and computer consumables — you cannot claim these separately.
• Alternatively, use the actual cost method — calculate real costs and apportion for business use with detailed records.
• Under the actual cost method you need utility bills, internet invoices, and a documented business-use calculation.
• Occupancy expenses (rent, mortgage interest, council rates) are generally NOT claimable unless you have a dedicated home office used exclusively for business.
• To use the fixed rate method you must keep a record of all hours worked from home for the entire income year — the ATO no longer accepts a 4-week representative sample.

Limits

Fixed rate: 67c/hour with no cap on hours but complete records required all year. Actual costs: evidenced and apportioned to business use.

Worked Example

Priya works from home 1,600 hours during 2024/25. Fixed rate: 1,600 × $0.67 = $1072. Using actual cost method: electricity $1,800 + internet $600 = $2,400 total household costs for those items, used 45% for business = $1,080. Priya chooses the fixed rate as it produces a higher and simpler claim.

Record Keeping

• Keep a complete log of hours worked from home for the full year (1 July to 30 June)
• Retain utility bills and internet invoices (actual cost method)
• Document your business-use percentage calculation with workings
• Keep receipts for any office supplies or equipment purchased separately
• Note which method you use — you cannot switch mid-year

Frequently Asked Questions

Which method is better — fixed rate or actual cost?

The fixed rate (67c/hr) is simpler and requires fewer records — just an all-year hourly log. Actual costs may give a higher deduction if your electricity and internet bills are significant and you work from home frequently. Calculate both for your situation before choosing.

Can I claim rent for my home office?

Generally no, unless you have a dedicated room used exclusively for business (this is an occupancy expense). Claiming occupancy expenses may have CGT implications on the home — discuss with your tax agent before claiming this.

Do I need a dedicated room to claim home office?

No. You can claim under the fixed rate method even if you work at the kitchen table. You just need to record hours worked from home throughout the year.

Can I claim home office and also use the ATO's myDeductions tool?

Yes. The ATO's free myDeductions app (part of myGov) can record your hours worked from home, receipts, and vehicle trips throughout the year, making end-of-year data entry much simpler. Records kept in myDeductions are accepted by the ATO as evidence.