Working From Home? Claim 67 Cents Per Hour! The 'Fixed Rate' Tax Deduction Explained

Working From Home? Claim 70 Cents Per Hour! The 'Fixed Rate' Tax Deduction Explained

Working From Home? Claim 67 Cents Per Hour!

The way we work has changed. Whether you are fully remote or hybrid, your home has become your office. This means your electricity bill, internet costs, and heating expenses have gone up.

The good news? The ATO (Australian Taxation Office) wants to pay you back. But you need to know how to claim it correctly.

Forget collecting every single electricity bill. The easiest way to maximize your refund is the Revised Fixed Rate Method (70 cents per hour).

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Method 1: The Fixed Rate (70 Cents)

This is the most popular method because it is simple. The ATO allows you to claim a flat rate of 70 cents for every hour you worked from home.

What it covers (You cannot claim these separately):

• Electricity and Gas (Energy expenses).
• Phone and Mobile usage.
• Internet (Data) expenses.
• Stationery and Computer Consumables (ink, paper).

What you CAN claim separately (On top of the 70 cents):

• Depreciation of assets costing over $300 (e.g., Office Chair, Desk, Monitor, Laptop).
• Repairs to office equipment.
• Cleaning expenses (only for a dedicated home office).

💰 The Math (Example)

You work from home 3 days a week (24 hours) for 48 weeks a year.

• Total Hours: 24 hours x 48 weeks = 1,152 hours.
• Deduction: 1,152 x $0.70 = $806.40 deduction.

Plus, you bought a standing desk for $500. You can claim the decline in value (depreciation) of that desk separately too!

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Method 2: The Actual Cost Method

This is the "Hard Mode." You calculate the exact portion of your household bills used for work.

• You must measure the floor area of your workspace (e.g., 10% of the house).
• You must keep every receipt for electricity, gas, internet, and phone.
• You must calculate the percentage of work use vs. private use for every single bill.

Verdict: Unless you have a dedicated home office room and extremely high bills, this method is usually not worth the headache.

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The "No Rent" Rule

A massive misconception is that you can claim a portion of your Rent or Mortgage Interest.

NO. Generally, employees CANNOT claim occupancy expenses. You can only claim this if you run a business from home AND have a dedicated area that is not used for anything else. If you are just checking emails at the dining table, claiming rent will trigger an ATO audit.

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Crucial Rule: The Record Keeping

The ATO has become strict. You can no longer just "guess" or provide a 4-week sample.

⚠️ You Need a Full-Year Record

To use the Fixed Rate method, you must have a record of the actual total number of hours worked for the entire year.

This could be:

• A timesheet.
• A roster.
• A diary or calendar entry for the whole year.

Estimates or a 4-week representative diary are NOT accepted for the Fixed Rate method anymore. If the ATO asks and you don't have this record, your claim will be denied.

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Chief Editor’s Verdict

Don't leave money on the table.

Start a simple spreadsheet or use an app to log your WFH hours today. Those 70 cents add up. An $800 deduction could mean an extra $250+ in your pocket at tax time. Just remember: No Record = No Refund.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial or taxation advice. Tax rates (currently 67 cents for 2023-24 and 70 cents for 2024-25 onwards) and rules change frequently. Please consult with a registered tax agent or the ATO to ensure your claim meets the latest eligibility and record-keeping requirements.