Work From Home Tax Deduction Calculator
Fixed Rate Method
70 cents per hour
Actual Cost Method
Comparison
How WFH Deductions Work
The Fixed Rate Method (revised) allows you to claim 70 cents for each hour you work from home. This covers electricity, phone, internet, stationery and computer consumables. You still need to keep a record of hours worked from home.
The Actual Cost Method requires you to calculate the actual work-related proportion of each expense. You must keep receipts and records to substantiate each claim. This method may give a higher deduction if your actual costs are significant.
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Frequently Asked Questions
What is the Fixed Rate Method for WFH deductions?
The Fixed Rate Method (revised from 1 July 2022) allows Australian taxpayers to claim 70 cents for each hour worked from home. This single rate covers the combined cost of electricity, phone, internet, stationery, and computer consumables — you don't need to calculate each expense separately. For example, if you work from home 20 hours per week for 48 weeks, your deduction is 20 × 48 × $0.70 = $672. You must keep a record of actual hours worked from home (timesheet, roster, diary, or similar document) for the entire year. You can still separately claim items not covered by the fixed rate, such as office furniture depreciation and dedicated work phone lines. Source: ATO — Working from home expenses (ato.gov.au).
What is the Actual Cost Method?
The Actual Cost Method requires you to calculate the real work-related proportion of each home expense separately. This typically includes: electricity (based on office floor area as a percentage of total home area, e.g. 10m² office in 100m² home = 10%), internet (percentage of work use vs personal use), mobile phone (work-use proportion based on a representative 4-week diary), and depreciation of office equipment (e.g. a $2,000 desk depreciated over 10 years = $200/year). You must keep receipts, bills, and records showing how you calculated each proportion. This method usually gives a higher deduction when actual costs exceed approximately $1,200–$1,500 per year. Source: ATO — Working from home expenses (ato.gov.au).
Which method gives a bigger deduction?
The Fixed Rate Method typically gives a bigger deduction when you work many hours from home but have low actual costs — for example, full-time WFH (38 hrs × 48 weeks × $0.70 = $1,277) with modest electricity and internet bills. The Actual Cost Method usually wins when you have a dedicated home office (larger floor area percentage), expensive internet plans ($100+/month with high work-use), significant equipment depreciation, or high electricity bills. As a rule of thumb: if your combined actual expenses exceed $1,400/year, the Actual Cost Method is likely better. If you work full-time from home with average costs, the Fixed Rate Method is simpler and often competitive.
What records do I need to keep for WFH deductions?
For the Fixed Rate Method: a contemporaneous record of actual hours worked from home for the entire income year. Acceptable formats include timesheets, rosters, employer time-tracking systems, or a personal diary/spreadsheet. You no longer need a dedicated home office area. For the Actual Cost Method: receipts or statements for every expense claimed (electricity bills, internet bills, phone bills, equipment purchase receipts), plus documentation of how you calculated the work-related proportion — such as floor area measurements, a 4-week phone usage diary, or internet usage data. Keep records for 5 years from lodgement. Source: ATO record-keeping requirements (ato.gov.au).
Can I claim using both methods in the same year?
No. You must choose one method — either Fixed Rate or Actual Cost — for the entire financial year. You cannot use the Fixed Rate Method for part of the year and switch to Actual Cost for the remainder. However, you can freely change which method you use from one financial year to the next (e.g. use Fixed Rate in FY2024-25 and Actual Cost in FY2025-26). The best approach is to calculate both methods each year using this calculator, then lodge using whichever gives the higher deduction. Note: under both methods, you can still separately claim the decline in value of depreciating assets (furniture, equipment) used for work. Source: ATO (ato.gov.au).