Working From Home (WFH): What Can You Actually Claim in 2025-26?

If you have been clocking in from home, there is good news at tax time: you may be able to claim a working from home (WFH) deduction. Before you start, it pays to understand exactly what you can claim, what records you need, and which method works out best for you. This guide covers the rules for the 2025-26 financial year, including the current fixed rate of 70 cents per hour.

Am I Actually Eligible to Claim?

Not every hour spent at home counts. To claim a working from home deduction:

• You are working from home to do your job, not just occasionally checking emails or replying to a text from your boss.
• You are out of pocket because of it, through higher power bills, more internet use, and the like.
• You have kept records proving both the expenses and the hours you worked from home during the year.

So if you work from home one afternoon a month to dodge peak-hour traffic and don't spend a cent extra, this deduction isn't for you. But if you are regularly at home and your electricity, phone and internet bills are creeping up as a result, you are likely in the right territory.

Two Ways to Work Out Your Claim

The ATO gives you two options: the fixed rate method and the actual cost method. You can only use one method per expense, so it is worth understanding both before you decide.

1. Fixed Rate Method

Instead of tracking every bill to the last cent, you claim a set rate for every hour you work from home. For 2025-26 that rate is 70 cents per hour. It is designed to cover the expenses that are genuinely hard to split between work and personal use:

• internet
• mobile and home phone usage
• electricity and gas
• computer consumables like printer ink
• stationery.

The catch: because the fixed rate already bundles those in, you can't claim any of them again separately. What you can still claim on top is the decline in value of assets used for work, such as your laptop or office chair, along with repairs and maintenance of that equipment, plus cleaning costs if you have a dedicated home office.

Example: say you work from home 15 hours a week for 48 weeks of 2025-26, that is 720 hours. Multiply by 70 cents and you get a $504 deduction under the fixed rate method. On top of that, you can still add the decline in value of your work laptop separately.

2. Actual Cost Method

Here you work out the real, dollar-for-dollar cost of each work-related expense, including the same categories the fixed rate covers (internet, phone, electricity, gas, stationery, computer consumables), plus the decline in value, repairs and cleaning of your home office equipment.

The trade-off for potentially claiming more is far more detailed record-keeping. To claim electricity, for instance, you would need to know the actual cost per unit of power and roughly how many units your work devices use per hour. It is precise, but it takes work to get right.

Either way, as an employee working from home you generally can't claim occupancy expenses like rent, mortgage interest or home insurance. Those belong to a different category of deduction, and mostly apply to running an actual business from home.

What Records Do You Actually Need?

If you don't have the records, don't claim the expense. The ATO isn't interested in estimates, so here is what proof looks like for each method.

Worth noting: a bank or credit card statement alone generally isn't enough proof of a work-related expense. The ATO wants to see the actual receipt or invoice, not just a line item on a statement.

If you are using the fixed rate method, keep:

• A record of every hour you worked from home across the year, such as a timesheet, roster or diary. A rough guess at year end won't cut it.
• Evidence of the expenses the fixed rate covers. If you use your phone and pay electricity while working from home, keep at least one bill for each.
• Records for any assets you are claiming separately, like a computer, including how you worked out its work-related use percentage.

If you are using the actual cost method, keep:

• A record showing your pattern of working from home, ideally at least four consecutive weeks that represent your usual routine.
• Evidence for every expense you claim: actual receipts, bills or invoices showing who supplied it, how much it cost, what it was, and when it was paid.
• Evidence showing the split between your personal and work-related use of each item or service.

For any depreciating assets (laptops, monitors, office furniture) under either method, you will also need the supplier's name, cost, description and purchase date, the date you started using it for work, how you calculated your work-related use percentage, either a copy of the Commissioner's determination of effective life or your own working-out, and a note of which method you used to calculate the decline in value.

Fixed Rate or Actual Cost: Which Should You Use?

There is no one-size-fits-all answer. If your bills are modest and you would rather avoid tracking every kilowatt-hour, the fixed rate method is usually simpler. If you have a dedicated home office, higher running costs, and you are diligent about receipts, the actual cost method might get you a bigger deduction, but only if your record-keeping is up to scratch.

Either way, the deduction only covers the work-related portion of an expense. If you spend half your time on personal browsing and half on work, you can only claim the work half.

For the 2025-26 financial year, the fixed rate is 70 cents for every hour you work from home.