Working from Home Tax Deductions to Claim in Australia (2025)

Working from Home Tax Deductions to Claim in Australia (2025)

With remote work becoming increasingly common, many Australians are looking for ways to maximise their work-from-home tax deductions. The Australian Taxation Office (ATO) has clear guidelines on what can and cannot be claimed, making it essential to understand the rules to ensure you receive the full benefits.

Understanding Work from Home Tax Deductions

To be eligible for deductions, you must perform your job duties from home, not just occasionally check emails. You must also incur additional work-related expenses that your employer has not reimbursed. Keeping proper records is crucial to substantiate your claims.

Methods for Claiming Deductions

The ATO offers two main methods:

  • Fixed Rate Method: As of 2025, the rate remains 67 cents per hour worked from home. This covers electricity, internet, phone, stationery, and depreciation of office equipment.

  • Actual Cost Method: This method requires detailed calculations and allows you to claim exact work-related expenses, including electricity, internet, office furniture, cleaning, and phone bills.

 What Can and Cannot Be Claimed

 Eligible Deductions:

  • A portion of utility bills (electricity, gas, internet, phone).

  • Office supplies (paper, printer ink, stationery).

  • Depreciation on assets (computers, chairs, desks).

  • Cleaning costs (for a dedicated home office).

  Ineligible Deductions:

  • Rent and mortgage payments (even if working from home).

  • Council rates and home insurance.

  • Meal and beverage costs.

  • Reimbursed expenses covered by your employer.

Record-Keeping Requirements

The ATO has increased scrutiny on claims, making proper record-keeping essential. Ensure you maintain:

  • Receipts and invoices for expenses.

  • Work-from-home diaries logging hours worked.

  • Bank statements for work-related purchases.

Many professionals now opt to outsource bookkeeping and tax preparation to stay compliant. Should you do the same? Find out more

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