Turn Your Home Office into a Tax Deduction

Want to Claim More?

If you want to claim the actual costs of mobile use, internet, or utilities, you'll need to use the actual cost method for all work-from-home expenses—not the fixed rate.

What can be claimed separately?

• The decline in value of assets used while working from home, such as computers and office furniture.
• The repairs and maintenance of these assets.
• The costs associated with cleaning a dedicated home office.

Compliance & Substantiation Requirements

The biggest challenge with the new 70¢ fixed rate method is the increased record-keeping required to claim it.

You Must Track All Hours Worked from Home:

• From 1 March 2023 onwards, you must keep a complete and accurate record of every hour you work from home for the entire income year.
• The ATO no longer accepts estimates or a 4-week representative diary for any period after this date.

Acceptable records include:

• Timesheets
• Rosters
• Logins to business/employer systems
• A daily work diary (for the full year)

Keep Proof of Expenses

Even though the fixed rate bundles certain costs, you still need at least one record (e.g. a bill or invoice) for each included expense category:

• Electricity or gas
• Phone (mobile or landline)
• Internet
• Stationery and computer consumables

Reminder: All records must be kept as they occur, not created later. The ATO is strict on this.

Actual Cost Method

The actual cost method allows you to claim the precise work-related portion of all your working-from-home running expenses.

What You Can Claim:

You can claim a percentage of your actual costs for things like:

• Electricity and gas
• Depreciation of office equipment and furniture
• Phone and internet usage
• Stationery and consumables
• Repairs and maintenance

Compliance Obligations:

To claim using this method, you must keep detailed records, including:

• Receipts, bills, and invoices showing the expenses you’ve incurred
• A record of hours worked from home
  • Can be actual hours, or
  • A representative 4-week diary showing your usual work-from-home pattern
• Evidence of work-related vs private use
  • For example, a 4-week usage diary for assets like a laptop or internet service

Can I Claim Rent or Mortgage Interest for Working from Home?

Generally, “occupancy expenses” — such as:

• Mortgage interest (for homeowners)
• Rent
• Council rates
• Home insurance

cannot be claimed as work-related deductions. This is because these costs are considered fixed and don’t change whether or not you work from home.

Exception: Running a Business from Home

If you operate a business from your home, you may be able to claim a portion of your occupancy expenses. This applies if:

• Your home is your primary place of business (e.g., a hairdresser using a room as a salon).
• You work at clients’ sites but use your home as a base for administration, storage, or tool storage (e.g., an electrician with a home office and tool storage).

What can I Claim?

The table below shows the deductions you can claim for the three ways you can work at home?

What you can claim			How you work
	Home is your place of business or work and you have a home work area		Home is not your place of business but you have a home work area	You work at home but you don't have a home work area
Occupancy expenses Cost of owning or renting the house	Yes		No	No
Runnings expenses Cost of using a roe (such as gas or electricity)	Yes		Yes	Yes
Business pheon costs	Yes		Yes	Yes
Depreciation of curtains, carpets, light fittings. etc	Yes		Yes	No
Decline in value of office plant and equipment (such as desks, chairs and computers)	Yes		Yes	Yes

How much can I claim?

There's no maximum amount that you can claim. Provided that the amount you're claiming is calculated in accordance with the rules, and that you have the necessary substantiation to back up your claim, you can claim whatever you're entitled to.