Working from home has its perks—flexible hours, no commuting, and comfy clothes. But let’s be honest, it also comes with extra costs. Higher electricity bills, increased internet usage, and spending your own money on office supplies all add up.
The good news? You might be able to claim these costs as tax deductions.
The problem? Many people either miss out on deductions they are entitled to or accidentally claim the wrong things.
That is where this guide comes in. We will break down exactly what you can claim, how to calculate your expenses, and what records you need to keep.
Can You Claim Working from Home Expenses?
Not everyone who works from home can claim deductions. The ATO (Australian Taxation Office) has strict rules, and if you do not meet them, you might be out of luck. To be eligible, you must:
- Be working from home to fulfil your employment duties. (Simply checking emails or taking occasional calls doesn’t count.)
- Incur additional costs as a result of working from home.
- Keep records that prove you incurred these expenses. (No records? No deduction. It’s that simple.)
If you meet these conditions, let’s move on to what you can claim.
Expenses you can claim
Additional Running Expenses
Working from home means your household bills are higher than usual. You can claim deductions for the extra costs related to:
Electricity and gas – Heating, cooling, and lighting your workspace.
Internet and phone costs – Whether it is your home Wi-Fi or mobile data.
Office supplies – Printer ink, paper, stationery.
Depreciation of office furniture – Chairs, desks, and shelves.
Depreciation of equipment – Laptops, computers, printers, software.
Repairs and maintenance – If your work-related equipment or furniture needs fixing.
If you have a dedicated home office, you may also be able to claim:
- A portion of your rent or mortgage interest (conditions apply).
- Cleaning costs for your office space.
But before you go adding everything to your tax return, let’s talk about what you can’t claim.
What You Can’t Claim
The ATO is strict about what doesn’t qualify for a deduction. You can’t claim:
- Coffee, tea, milk, and snacks—even if your workplace used to provide them.
- Equipment for your child’s education—like desks, tablets, or subscriptions.
- Anything your employer has already paid for or reimbursed.
- Expenses shared with other household members who aren’t working from home.
For example, if you’re working from the lounge room while your partner and kids watch TV, you can’t claim heating, cooling, or lighting expenses for that space.
How to Calculate Your Work from Home Expenses
From 1 July 2022, the ATO provides two methods to claim your deductions:
1. Fixed Rate Method (67 cents per hour)
This is the simpler option. You can claim 67 cents per hour worked from home, covering:
- Electricity and gas.
- Internet and phone expenses.
- Stationery and office consumables.
What’s not covered?
You’ll need to claim separately for items like computers, desks, or other depreciating assets.
Do you need a dedicated home office?
No. Unlike older methods, you don’t need a separate workroom to use this method.
What records do you need?
A detailed log of hours worked and proof of expenses.
2. Actual Cost Method
This method is more detailed but can get you a larger deduction if you track everything properly.
You can claim the actual additional expenses you’ve incurred, including:
- Electricity and gas – Calculate the exact power consumption of your work area.
- Phone and internet bills – Work out the percentage used for work.
- Depreciation of office furniture and equipment – Computers, desks, chairs.
- Cleaning costs – If you have a dedicated home office.
What records do you need?
- Receipts for everything.
- A logbook showing work-related vs. personal use of expenses (e.g., phone calls).
- A calculation of how much extra electricity you’re using for work.
What About Previous Tax Years?
If you’re claiming for a prior year, the rates and methods have changed:
Shortcut Method (80 cents per hour) – Available only from 1 March 2020 to 30 June 2022. It covers all expenses but means you can’t claim anything else separately.
Old Fixed Rate Method (52 cents per hour) – Used before 30 June 2022 and required a dedicated home office.
Why Keeping Records is Critical
The ATO isn’t going to take your word for it—you need proof. If you don’t keep proper records, you risk:
- Losing deductions you’re entitled to.
- Being audited and forced to pay back incorrect claims.
- Wasting money that could have been saved.
Here’s what you must keep:
- A log of hours worked from home (spreadsheet, diary, or time-tracking app).
- Receipts for equipment, furniture, and office supplies.
- Phone and internet bills, highlighting the work-related portion.
- Electricity and gas calculations (if using the actual cost method).
No records = No claim. Simple as that.
Do not let your money go to waste
If you are working from home and not claiming everything you’re entitled to, you are handing free money to the ATO.
So, it is your duty to Know what you can claim, choose the right method, and keep your records in order.
So, ask yourself:
- Are you making the most of your tax deductions?
- Have you kept proper records of your expenses?
- Could you be putting more money back in your pocket?
If the answer to any of these is “no” or “I’m not sure,” it’s time to take action.
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