Working From Home (WFH) Deduction Guide

Updated: April 2026

ATO Audit Warning

The ATO has made it clear that they are heavily scrutinising working from home deductions for the 2026 financial year. Estimates or retrospective records are no longer accepted. If you cannot provide real-time records, your claim may be completely disallowed and penalties applied.

1. The Revised Fixed Rate Method

The most common way to claim WFH expenses is using the fixed rate of $0.67 per hour. This rate covers: energy expenses (electricity, gas), internet, mobile data, and stationery.

Key Requirements:

  • You must keep real-time records for the entire year (e.g., daily timesheets, diaries, or rosters).
  • You do not need to keep specific bills for electricity or internet.
  • You can claim depreciation separately for computer hardware and office furniture (if over $300).

WFH Deduction Estimator

Adjust the sliders below to quickly estimate your potential deduction for this financial year using the fixed rate method.

Estimated Total Deduction (at $0.67/hour)

$1222.08

Includes: Electricity, gas, internet, mobile data, and stationery.

Excludes: Depreciation of assets like computers, monitors, and office chairs (these can be claimed separately).

2. The Actual Cost Method

If your work requires significant power consumption or high phone bills, you may choose the actual cost method. However, this requires meticulous record-keeping:

  • Specific receipts and bills for all expenses.
  • Detailed calculation logic proving the work-related percentage of total expenses.
  • A floor plan analysis showing the proportion of your dedicated home office area to the entire house.

3. What CANNOT be claimed?

Even if you are working from home, the following expenses are strictly prohibited:

  • Food and groceries like coffee, tea, and milk.
  • Cleaning costs, rent, or mortgage interest if you occasionally check emails on the couch without a dedicated work area.
  • Generally, employees cannot claim occupancy expenses like rent or mortgage interest.

Professional Advice: We strongly recommend using the myDeductions tool in the ATO app to record your hours in real-time. If you are unsure which method yields the best tax outcome for you, please book a consultation with us.

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