Work From Home Tax Deductions: What You Can (and Can’t) Claim in 2026

Working From Home? Here’s How to Claim Your Tax Deductions Correctly

Remote and hybrid work has become a permanent feature of Australian working life. Across Brisbane’s north — from Mango Hill to Dakabin — thousands of professionals split their time between home and the office. If you’re one of them, you’re likely entitled to meaningful tax deductions for your home office expenses.

But the rules have changed in recent years, and the ATO is paying close attention to work-from-home (WFH) claims. As a CPA and Registered Tax Agent at Tax Serve, I regularly help clients navigate these rules to ensure they claim every dollar they’re entitled to — without attracting ATO scrutiny.

Two Methods for Claiming WFH Expenses

From the 2022-23 financial year onwards, there are two methods for claiming home office running expenses: the revised fixed rate method and the actual cost method. The old “shortcut method” (80 cents per hour) and the previous fixed rate (52 cents per hour) no longer apply.

Method 1: Revised Fixed Rate Method (67 cents per hour)

This is the simpler of the two methods. You claim a flat rate of 67 cents for every hour you work from home. This rate covers:

• Electricity and gas for heating, cooling, and lighting your workspace
• Home internet expenses
• Mobile and home phone costs used for work
• Stationery and computer consumables (ink, paper, USB drives)

What You Can Claim on Top of the Fixed Rate

Even when using the fixed rate, you can separately claim the decline in value (depreciation) of assets used for work, including:

• Computers, laptops, tablets, and monitors
• Office furniture (desk, ergonomic chair, bookshelf)
• Printers and scanners
• Headsets and webcams

Assets costing $300 or less can be claimed in full immediately. Assets over $300 are depreciated over their effective life. For example, a laptop typically has an effective life of four years, so a $1,600 laptop can be depreciated at $400 per year.

Record-Keeping Requirements

To use the fixed rate method, you must keep a record of the total number of hours you worked from home during the entire income year. Acceptable records include:

• Timesheets or rosters
• A diary or calendar of hours worked from home
• Time-tracking software or apps
• Login/logout records from your employer’s systems

You do not need to keep receipts for the expenses covered by the fixed rate (electricity, internet, phone). However, you must keep receipts and records for any assets you claim separately.

Method 2: Actual Cost Method

The actual cost method involves calculating the precise work-related proportion of each expense. This method requires more effort but can result in a larger deduction if your expenses are significant.

Expenses You Can Claim

• Electricity and gas: Calculate the work-related proportion based on your home office area, appliance wattage, and hours used
• Internet: The work-related percentage of your internet plan
• Phone: The work-related percentage of your mobile and/or home phone plan
• Stationery: Work-related stationery and consumables
• Depreciation: Decline in value of home office equipment (same as under fixed rate)
• Cleaning: If you have a dedicated home office, you can claim the cost of cleaning that room
• Repairs: Costs of repairing home office furniture or equipment

Record-Keeping Requirements

The actual cost method has stricter record-keeping requirements. You must keep:

• Receipts or bills for every expense you claim
• A reasonable basis for your work-related percentage calculation
• A record of hours worked from home
• A diary or log of how you calculated your apportionment

Which Method Should You Choose?

The right method depends on your personal circumstances. Here’s a practical comparison:

Scenario	Better Method	Estimated Claim
WFH 2 days/week (800 hrs/year)	Fixed Rate	$536 + depreciation
WFH 3 days/week (1,200 hrs/year)	Compare both	$804 (fixed) vs actual
WFH full-time (1,800 hrs/year)	Often Actual Cost	$1,206 (fixed) vs $1,500-$2,500+ (actual)
Large dedicated home office, high electricity	Actual Cost	Can exceed $2,000+

As a general rule: if you work from home frequently and have a large, dedicated office space with significant running costs, the actual cost method will likely produce a larger deduction. If you WFH only one or two days a week, the simplicity of the fixed rate method usually makes more sense.

What You Can’t Claim

Several common expenses are not deductible as WFH expenses, regardless of which method you use:

• Occupancy costs: Rent, mortgage interest, property insurance, land tax, and council rates cannot be claimed by employees (only by those running a business from home)
• Coffee and snacks: The ATO does not allow deductions for food and beverages consumed while WFH
• Children’s education costs: Homeschooling expenses are not work-related
• General household items: TVs, lounge furniture, and general household appliances, even if occasionally used during work hours
• Internet or phone used 100% personally: If you have a plan that isn’t used for work at all, you can’t claim any portion of it

Common Mistakes the ATO Catches

The ATO uses data analytics to compare WFH claims across occupations and income levels. These are the most common errors they flag:

1. Claiming without records: You must have contemporaneous records of hours worked from home. Estimates and round numbers are red flags.
2. Double-dipping: If your employer reimburses you for WFH expenses (like an internet allowance), you can’t also claim those expenses as a deduction.
3. Claiming the full cost when usage is shared: If your internet or phone is used by the whole family, you can only claim your work-related portion.
4. Using the wrong method: You must choose one method and apply it consistently for the entire year. You cannot switch methods mid-year.
5. Overclaiming asset depreciation: If an asset is used for both work and personal purposes (e.g., a home computer), you must apportion the depreciation based on work-related use.

Setting Up Your Home Office for Maximum Claims

If you’re planning to maximise your WFH deductions going forward, consider these steps:

• Designate a dedicated workspace: Having a room or defined area used primarily for work strengthens your claim
• Start tracking hours now: Use a simple spreadsheet, Google Calendar, or a time-tracking app
• Keep all receipts: Digitise receipts for every home office purchase (furniture, equipment, stationery)
• Review your internet plan: If you’re on a basic plan, upgrading to a faster plan may be partially deductible — and it improves your productivity
• Get a depreciation schedule: For significant assets, a formal schedule ensures you claim the right amount each year

Need Help With Your WFH Claims?

The rules around work-from-home deductions are specific and the ATO is actively auditing claims. Getting it wrong can mean penalties, interest charges, and repayment of overclaimed amounts. Getting it right means more money in your pocket — legally.

At Tax Serve in North Lakes, we help Brisbane professionals — from Petrie to Griffin — claim their WFH deductions correctly and confidently. Our monthly accounting services include ongoing advice on record-keeping and deduction strategies throughout the year.

Book your tax return appointment today and make sure you’re claiming everything you’re entitled to.