What work from home expenses are tax deductible in 2026?

Hybrid work is now normal, and work-from-home claims are one of the most common deductions in Australian tax returns. They are also one of the areas the ATO reviews most often. To claim, you must be working from home to perform your employment duties, rather than, for example, occasionally checking emails. You must also incur additional running expenses as a result, and keep the right records.

Two methods: fixed rate or actual cost

Fixed rate method: 70 cents per hour

For 2025–26, you can claim 70 cents for each hour you work from home. The rate covers:

• electricity and gas for heating, cooling and lighting
• home and mobile internet
• mobile and home phone usage
• stationery, printer ink and computer consumables

You can't claim those expenses again separately. You can separately claim the decline in value of work equipment such as a desk, chair or monitor, and repairs to that equipment.

Actual cost method

You calculate the actual additional costs you incurred from working at home, with evidence of both the cost and the work-related proportion. It takes more work, but it can produce a higher deduction if you have a dedicated home office or high running costs.

The records you need

Fixed rate: a record of the actual hours you worked from home for the whole year, such as timesheets, rosters or a diary. Estimates aren't accepted. You also need a bill or receipt for each type of expense the rate covers.

Actual cost: hours records, plus receipts, itemised bills and a reasonable calculation of your work-related use for each expense.

Equipment: the date of purchase, cost, supplier, work-use percentage and date it was first used. Items costing $300 or less can be claimed immediately; more expensive items are depreciated.

A warning about occupancy expenses

Most employees can't claim occupancy expenses such as rent, mortgage interest, council rates or home insurance. Where they can, for example because the home is genuinely a place of business, claiming them may reduce your main residence capital gains tax exemption when you sell. Talk to us before claiming.

The proposed $1,000 instant deduction

The government has proposed a standard $1,000 deduction for work-related expenses, which would let eligible workers claim without itemising. It does not apply to 2025–26 returns, and it is a deduction, not a refund. If your actual work expenses exceed $1,000, itemising will still give you a better result.

Five common mistakes

1. Claiming equipment your employer provided or paid for.
2. Estimating hours instead of recording them.
3. Not comparing both methods before choosing one.
4. Claiming the same expense twice (for example, phone costs under the fixed rate and again separately).
5. Forgetting to declare a work-from-home allowance as income.

Quick answers

Can I change methods each year?

Yes. You can choose the method that suits your circumstances each income year, as long as you have the records for it.

Can I claim if I only work from home some days?

Yes, but only for the hours you actually worked from home.

This article contains general information only and does not take your personal circumstances into account. Tax and superannuation rules change, and some measures discussed may be subject to legislation. Speak with a registered tax agent before acting.