Work From Home Tax Deductions: What You Can Claim in 2025

Working from home has become the norm for many Australians. The good news is that the ATO allows you to claim a deduction for the additional expenses you incur. Here's what you need to know for the 2024–25 financial year.

The Revised Fixed Rate Method (67 cents/hour)

From 1 July 2022, the ATO revised the fixed rate method to 67 cents per hour worked from home. This rate covers:

• Electricity and gas (lighting, heating, cooling)
• Internet (work-related portion)
• Mobile and home phone (work-related portion)
• Stationery and computer consumables

You cannot claim these expenses separately if you use the fixed rate method.

What You Can Still Claim Separately

Even if you use the fixed rate method, you can still separately claim:

• Depreciation on office furniture and equipment (desk, chair, monitor)
• Repairs and maintenance of work-related equipment
• The work-related portion of phone and internet if you choose the actual cost method instead

Records You Must Keep

The ATO now requires you to keep a record of all hours worked from home for the entire income year. A diary, timesheet, or roster is acceptable. You can no longer rely on a four-week representative sample.

The Actual Cost Method

If your actual home office expenses are higher than what the fixed rate method provides, you can use the actual cost method instead. This requires you to calculate the work-related portion of each expense individually and keep all receipts.

Common Mistakes to Avoid

• Claiming the fixed rate without keeping hourly records
• Claiming the full cost of internet or phone without apportioning for personal use
• Claiming rent or mortgage interest (only available if you run a business from home)

If you're unsure which method is best for your situation, speak to one of our registered tax agents at Illawarra Accounting and Tax.