How do I claim home office expenses in Australia (Fixed Rate vs Actual)?

As of July 2022, the ATO revised the methods for claiming home office expenses. There are two main methods: 1. **Fixed Rate Method (67 cents per hour):** This covers electricity, gas, stationery, computer consumables, and phone/internet usage. You must keep a record of all hours worked from home (a diary or timesheet). You don't need dedicated office space, but you must be doing actual work. You can still claim a separate deduction for the decline in value (depreciation) of furniture and tech equipment. 2. **Actual Cost Method:** You claim the actual business portion of all expenses. This requires detailed records, including the floor area of your dedicated office space vs the whole house, and itemised bills. It is more complex but may result in a higher deduction if your costs are high. Important: You cannot claim occupancy costs like rent or mortgage interest unless your home is your 'principal place of business' (e.g., you have a sign out front and clients visit), which is rare for most freelancers and digital workers.

• Fixed rate is 67 cents per work hour (covers utilities and internet/phone)
• Requires a continuous record (diary) of all hours worked
• Actual cost method requires receipts and floor area calculations
• Occupancy costs (rent/mortgage) are usually NOT deductible
• Equipment depreciation is claimed separately under both methods