If you work from home as an employee, there are two ways to claim: the fixed rate method (simpler) or the actual cost method (more records, sometimes a bigger claim).
Fixed rate method, step by step
- Check you qualify. You work from home to do your job (not just checking emails occasionally), you pay extra running costs because of it, and you keep records.
- Record every hour you work from home for the whole year: a timesheet, roster, diary or app. An estimate or a sample week isn't enough.
- Multiply the hours by the rate. For 2025–26 the rate is 70 cents per work hour. It covers power, gas, internet, phone, stationery and computer consumables.
- Add depreciation separately on things like a desk, chair or laptop used for work (work-use share only).
- Keep one bill for each cost covered by the rate (for example one power bill, one phone bill) to show you paid it.
Uses the 70-cent rate for 2025–26. The ATO publishes the rate for each income year; check it before you lodge.
Actual cost method
You work out the real extra cost of each expense and the work-use share. It needs itemised records, such as a diary of use over a representative period plus every bill. Worth it mainly if your real costs are well above the fixed rate.
Common slips
- Claiming the fixed rate and separately claiming power or internet again.
- No hours record kept through the year.
- Claiming rent or mortgage interest as an employee.
Sources
- ATO: Working from home, fixed rate method (70 cents per hour for 2025–26)
- ATO: Working from home expenses (overview)
Figures checked 1 November 2026.