Australia's Work From Home Tax Deduction: 67 Cents Per Hour, No Receipts

The ATO Will Pay You to Work From Home

If you work from home — even part of the time — you can claim a tax deduction of 67 cents per hour under the ATO's revised fixed rate method. This covers electricity, phone, internet, stationery, and computer consumables in a single, simple claim.

No individual receipts needed. No calculations for the percentage of your electricity bill that goes to work. Just track your hours and multiply by $0.67.

For someone working from home 3 days per week (roughly 1,200 hours per year), that's a deduction of $804. At a marginal tax rate of 32.5%, that puts approximately $261 back in your pocket at tax time.

How the Fixed Rate Method Works

Since 1 July 2022, the ATO's fixed rate method lets you claim 67 cents per hour worked from home. This single rate covers:

• Electricity and gas for heating/cooling and lighting your workspace
• Phone and internet expenses
• Stationery and computer consumables (ink, paper, etc.)
• Depreciation of furniture and furnishings (desk, chair, shelves)

You cannot separately claim individual expenses for any of the above categories if you use this method — they're all bundled into the 67 cents.

However, you can separately claim on top of the 67c rate:

• Technology depreciation — laptop, monitor, keyboard, headset (items over $300 depreciated; under $300 claimed in full)
• Work-related software subscriptions
• Office equipment repairs

So if you bought a $1,500 laptop for work, you can claim depreciation on that in addition to the 67 cents per hour.

What You Need to Keep

The ATO requires you to maintain a record of hours worked from home. This can be:

• A timesheet
• A roster
• A diary or logbook
• Time-tracking software (Toggl, Clockify, etc.)
• Calendar entries showing WFH days

You don't need to keep a record for the full year — a representative 4-week period that reflects your usual pattern is sufficient. But keeping a full log is safer if audited.

You also need a dedicated workspace — it doesn't have to be a separate room, but you need an area set up for work (a desk and chair counts). Working from the couch occasionally is fine, but the ATO expects a genuine workspace exists.

Real Deduction Examples

WFH Pattern	Hours/Year	Fixed Rate Deduction	Plus $1,200 Laptop (3yr depreciation)	Total Deduction
2 days/week	~800	$536	$400	$936
3 days/week	~1,200	$804	$400	$1,204
5 days/week	~2,000	$1,340	$400	$1,740

At a 32.5% marginal rate, a $1,204 deduction saves you $391 in tax. At 37%, it saves $445.

The Alternative: Actual Cost Method

Instead of the fixed rate, you can calculate and claim actual expenses. This requires:

• Itemised electricity, gas, phone, and internet bills
• Calculation of the work-related percentage of each bill
• Receipts for all claimed items
• A dedicated workspace log

The actual cost method can result in higher deductions if you have high utility bills or an expensive home office setup. But for most people, the 67-cent fixed rate is simpler and sufficient.

The break-even point depends on your specific costs. If your electricity and internet bills are modest and you work from home 2-3 days per week, the fixed rate is usually better. If you work from home full-time and have high utility costs, run the numbers both ways before lodging.

Common Mistakes to Avoid

Don't claim if you don't WFH. Sounds obvious, but the ATO flags disproportionately high WFH claims. If your employer says you're office-based 5 days, don't claim WFH.

Don't double-claim. If you use the fixed rate method, you cannot also separately claim phone or internet. Pick one method and stick with it.

Don't forget to claim technology. Many people use the fixed rate but forget they can also claim their laptop, monitor, and peripherals on top. These are separate deductions.

Keep your records. The ATO has 4 years to audit your return (2 years for simple affairs). Keep your timesheets and receipts for at least that long.

How to Claim

When lodging your tax return through myTax or a tax agent:

1. Go to the Work-related expenses section
2. Select Working from home expenses
3. Choose the Fixed rate method
4. Enter your total hours worked from home during the financial year
5. Add any separate technology or equipment deductions

The system calculates the 67c × hours deduction automatically. If you use a tax agent, just provide your hours log and any technology purchase receipts.