Working from Home Expenses: What You Can Claim in 2024–25
As remote work becomes more common, many Australians incur additional costs at home that are deductible under ATO rules. There are three main methods for claiming working-from-home (WFH) expenses:
Choose the method that gives you the highest deduction, ensuring you meet the record-keeping requirements for each.
Source: ATO: Working from home expenses
1. Fixed-Rate Method
The fixed-rate (shortcut) method allows you to claim a flat rate of 70 cents per hour for each hour you work from home during 2024–25. This rate is designed to cover:
- Electricity and gas for heating, cooling and lighting
- Depreciation of home-office furniture (e.g. desks, chairs)
- Phone and internet expenses
- Stationery and computer consumables (e.g. printer paper, ink)
Key points:
- You must have incurred additional running expenses as a result of working from home.
- Keep a record of your hours worked (timesheet, diary entry).
- You cannot claim occupancy expenses (e.g. rent, mortgage interest) under this method.
Source: ATO: Fixed-rate method
2. Actual-Cost Method
If your actual running costs exceed the flat rate—or you prefer to claim specific expenses—you can use the actual-cost method. Under this method, you calculate the work-related proportion of:
- Electricity and gas for heating, cooling and lighting
- Depreciation of equipment and furniture
- Phone and internet costs
- Stationery and computer consumables
How to calculate:
- Determine total cost for each expense category for the income year.
- Calculate the percentage of use that relates to work (e.g. % of phone/internet data used for work, % of time equipment was used for work).
- Multiply the total cost by the work-usage percentage to get the deductible amount.
Record-keeping: You need detailed receipts and a record of how you calculated work-related use (e.g. log of data usage, percentage estimates supported by usage patterns).
Source: ATO: Actual-cost method
3. Occupancy Expenses
Occupancy expenses relate to the cost of your home itself, such as rent or mortgage interest, council rates, and home insurance. You can only claim these if:
- Your home is your principal place of business, and
- You maintain a separate area (e.g. a dedicated study) *exclusively* for work purposes.
Eligible occupancy expenses include:
- Mortgage interest or rent
- Council rates
- House and contents insurance premiums
How to calculate:
- Determine the floor area of your dedicated work space as a percentage of your home’s total floor area.
- Multiply this percentage by the total occupancy expense for the income year.
Important: You cannot claim occupancy expenses using the fixed-rate method; they are only claimable under the actual-cost method. Ensure you keep loan statements, rent statements, and insurance documents.
Source: ATO: Occupancy expenses
Choosing the Right Method
To decide which method maximises your deduction:
- Estimate your total hours worked from home and multiply by the flat rate (70c/hr).
- Estimate your actual running costs and occupancy expenses under the actual-cost method.
- Compare the two figures and choose the higher amount.
Remember:
- Records and receipts are essential—keep them for at least five years.
- Switching methods between years is allowed, but you must meet the requirements of each method in the year you claim.