There’s one line people say most often at tax time when they work from home.
“It’s some cents per hour, right? I just claim that?”
Correct — that’s the ATO’s fixed rate method. From the 2024-25 income year it’s 70 cents per hour.
But stopping there leaves a bit on the table. A work-from-home deduction has a fork in the road: go simple with 70 cents an hour, or work out your actual costs.
Most people only know the 70-cent method and stop. But if you work from home a lot, bought a lot of equipment, or have a clearly dedicated workspace, the actual cost method may be better. Conversely, if you only work from home occasionally, the 70-cent method can be much simpler and safer.
The Hanho Money way of putting it: a work-from-home deduction isn’t a game of claiming the most — it’s choosing the calculation method that fits your situation.
The bottom line
- There are broadly two options — the 70c/hour fixed rate or the actual cost method
- The 70c already includes electricity, gas, internet, phone, stationery and computer consumables
- So claiming internet or phone again while using the 70c can be double-dipping
- Depreciating assets like a computer, monitor, desk or chair can be considered separately from the 70c
- The key to both methods is a record of actual hours worked from home
- Costs your employer already reimbursed can’t be claimed again
① The two methods — what’s different
A work-from-home deduction comes down to two methods.
| Fixed rate (70c) method | Actual cost method | |
|---|---|---|
| Calculation | Hours worked from home × 70c | Work-use portion of actual costs |
| Pro | Simple, light on paperwork | Can be higher when costs are large |
| Con | Can’t also claim the included costs | Records and calculation are complex |
| You need | A record of hours worked from home | Hours + receipts per cost + work-use % |
| Suits | Hybrid / occasional WFH | Full-time WFH / high costs |
For example, if you worked 800 hours from home over the year, the fixed rate method is:
800 hours × $0.70 = $560
The number is simple. But you can’t then add internet, phone and electricity on top — they’re already inside the 70 cents.
The actual cost method, by contrast, works out electricity, internet, phone, consumables and so on for real. You also have to apportion the work-use share. It can be more accurate, but it needs more records.
② What’s inside the 70c
The 70c fixed rate bundles your working-from-home running expenses into one rate. Per the ATO, it includes electricity, gas and heating/cooling, home phone and mobile, internet, stationery, and computer consumables like printer ink and paper.
Here’s the important part: if you use the 70c method, you can’t separately claim these costs again.
Claiming a 70c deduction and then adding “internet, work-use portion” on top means claiming the same cost twice. That’s the most common mistake with this deduction. “70 cents an hour, plus internet, plus phone” can make the refund look bigger, but it’s hard to explain if the ATO asks later.
③ What you can still claim separately from the 70c
Using the 70c doesn’t mean your WFH costs are all done. Some items aren’t included — most notably the decline in value of depreciating assets.
Think of a laptop, desktop, monitor, keyboard and mouse, desk, chair, printer, webcam or headset. These can be considered separately from the 70c fixed rate, for the work-use portion.
Say you bought a $2,000 laptop and use it 80% for work, 20% personally — the work-use portion is 80%. Note that a higher-cost asset generally isn’t claimed all at once; it’s spread over several years as decline in value.
What matters here is the work-use percentage. Even a “work laptop” isn’t 100% work if you watch Netflix on it at night and sort personal email and photos on weekends.
④ The most important thing — a record of actual hours
The most important part of this deduction isn’t the rate. It’s the hours record.
There was a time you could estimate (“about two days a week”) or use a representative period. It’s much stricter now — to claim, you need a record of the hours you actually worked from home.
Usable records include a timesheet, roster, work calendar, diary, company login logs, work-from-home approval, or a spreadsheet.
The point is to show your actual pattern of work across the year. “Usually about two days a week” is weak. It matters even more for hybrid workers, where office days and home days are mixed.
And even with the fixed rate method, you still need evidence you actually incurred the included costs — for example, an electricity, internet or phone bill.
⑤ When the actual cost method wins
The actual cost method is more work. But in certain situations it can be better — for example, if you work from home almost full time, run high electricity/gas from heavy heating and cooling, have a clearly dedicated workspace, use internet and phone heavily for work, or have large equipment and consumable costs.
The catch is the calculation is more complex. You can’t just claim your whole electricity bill as a work cost — you have to reasonably apportion the share of your home the workspace takes up, your actual work hours, and personal use.
Internet is the same. It’s hard to claim a whole household’s internet as 100% work; you work out your own work-use share.
The actual cost method can give you more — but it also asks you to explain more.
⑥ Employees: be careful with rent and mortgage interest
Working from home, you might think: “I use part of my home as an office — can I claim rent or mortgage interest too?” Be careful here.
For an employee working from home, occupancy expenses like rent, mortgage interest, council rates and home insurance are generally hard to claim. Claiming them simply because you have a workspace at home is risky.
If you own your home, be even more careful. Using part of it as a place of business to claim occupancy expenses can affect your main residence CGT exemption when you sell.
Most ordinary employees who work from home are safest staying out of this territory. If unsure, check with a tax agent.
In one line: a work-from-home deduction is about running expenses like electricity and internet — not about turning your whole housing cost into a deduction.
⑦ If your employer already covered it, you can’t claim it again
The basic rule is simple: you paid it, your employer didn’t reimburse it, and it’s work-related.
If your employer gave you a laptop, you didn’t buy it. If your employer reimbursed your internet each month, that reimbursed part can’t be claimed again. If your employer bought your chair, you can’t claim it.
Also, employers increasingly offer a work-from-home allowance, an equipment allowance, or a phone allowance. How it appears on your payslip — and whether it’s a genuine reimbursement or an allowance — can change the tax treatment.
Choosing, through migrant examples
Full-time WFH IT developer — works from home nearly every day and bought a new monitor and chair. The 70c fixed rate alone gives a reasonable deduction, and the monitor and chair can be considered separately as depreciating assets. Actual cost may be better too, so comparing both is worth it.
Hybrid accountant — three days in the office, two at home. Recording only the hours worked from home and using the fixed rate can be the simple path. Suits, dress shoes and plain shirts generally aren’t deductible regardless.
Occasional WFH office worker — works from home now and then for childcare or personal reasons. If WFH hours are low, the deduction is small too. Rather than forcing an actual cost calculation, just recording the actual hours and keeping it simple is often better.
Working remotely in Australia for a Korean company — this one’s more complex. It can depend on your Australian tax residency, where the income arises, whether the employer is offshore, whether there’s PAYG, or whether it’s an ABN contract. Look at your income-reporting structure first, not just the WFH deduction.
Common mistakes
| Mistake | Why it’s a problem |
|---|---|
| Using 70c and also claiming internet | Double-claiming the same cost |
| Estimating without an hours record | Not enough of the record the ATO wants |
| Claiming employer-provided gear as your own | It’s not a cost you incurred |
| Claiming coffee, lunch, snacks | Generally private living costs |
| Easily claiming rent/mortgage interest | Employees: occupancy expenses risk |
| Claiming 100% of household internet | Personal-use share must be removed |
| Including days you didn’t work from home | Doesn’t match actual work hours |
With this deduction, a “number you can explain with records” beats a “plausible-looking number.”
Checklist before you lodge
- Did you record your hours worked from home across the year?
- Did you decide between the fixed rate and actual cost method?
- Did you avoid separately claiming internet/phone/electricity already inside the 70c?
- Did you consider computer/monitor/desk/chair depreciation separately?
- Did you reasonably work out the work-use percentage of equipment?
- Did you exclude anything the employer reimbursed?
- Did you keep bills for the electricity/internet/phone you actually paid?
- Did you check whether actual cost would give you more?
Wrap-up
The Australian work-from-home deduction is simpler than it looks — and wrong more often than you’d think.
The 70-cent method is easy, but you can’t re-add the costs already inside it. The actual cost method can yield more, but needs records and calculation. Assets like a computer and furniture can be viewed separately, but you have to think about work-use share and decline in value.
The Hanho Money conclusion: this deduction isn’t “how much can I claim” but “what can I explain.” With records, a deduction is a right. Without records, a deduction is a risk.
Related reading
- Don’t Just Copy Someone Else’s Deductions — Australian Tax Deductions by Occupation 2026
- ATO Tax Audits 2026 — How WFH, Car and Side-Gig Claims Get Flagged
- Filing Your Australian Tax Return Early Can Cost You — 7 Common Misconceptions
- What’s Changed for the 2026 Australian Tax Return
- Korea–Australia Money Map
This is general information, not personal tax advice. The work-from-home method, the fixed rate, actual cost calculations, depreciation and the treatment of employer-reimbursed costs can vary with your situation and income year. Before lodging, confirm against the ATO’s latest working from home expenses guidance or a Registered Tax Agent.