Working From Home Tax Deductions for Australian Families
A practical guide to WFH tax deductions for Australian families: fixed rate vs actual cost method, what's claimable, and how to keep ATO-ready records.
By AvaShort answer
If you work from home — even just one day a week — you can claim tax deductions for the expenses that come with it. The ATO gives you two ways to do it: the simple fixed rate method or the more detailed actual cost method. Most families are better off with the fixed rate, but it's worth understanding both.
Why this matters for families
Picture this: you and your partner both work hybrid jobs. You're at home three days a week, your partner two days. Between you, that's five WFH days every week — and for months on end, that adds up to real money on your electricity bill, internet plan, and all the little things that keep the home office running.
The ATO lets you claim back some of these costs. For a family where both parents work from home part-time, that could mean $500 to $1,500 extra in your tax refund each year — money that could go straight into the family budget, a kids' activity fund, or next year's holiday.
The two methods at a glance
| Fixed Rate Method | Actual Cost Method | |
|---|---|---|
| Rate | 67 cents per hour worked | Real expenses × work-use % |
| What it covers | Energy, internet, phone, stationery | Everything (including depreciation on furniture/tech) |
| Paperwork | Minimal — just a log of hours | Detailed — receipts + usage calculations |
| Best for | Most families, casual WFH | Dedicated home office, high expenses |
| Separately claimable | Depreciation on office equipment, cleaning (if dedicated) | Nothing separately (all included) |
Fixed rate method: the simple option
This is what I recommend for most families. Here's how it works:
Step 1: Track every hour you work from home. A simple diary, spreadsheet, or calendar entry works — just make sure it shows the date and hours.
Step 2: At tax time, multiply your total WFH hours by 67 cents.
Real-life example
Sarah works from home three days a week, about 22 hours. Over 48 working weeks (she takes four weeks off), that's:
22 hours × 48 weeks × $0.67 = $707.52
That's over $700 Sarah can claim — without keeping a single electricity bill. Her only record is a simple spreadsheet tracking her WFH days.
If her partner Mark also WFH two days a week (15 hours):
15 hours × 48 weeks × $0.67 = $482.40
Family total: $1,189.92 — from a few hours of record-keeping.
What the 67c already covers
The fixed rate includes:
- Home electricity and gas for heating/cooling
- Home internet
- Mobile phone (work-related portion)
- Stationery and printer ink
Pro tip: You can claim depreciation on big items like a desk, chair, or computer on top of the fixed rate. So if you bought a $400 standing desk and use it 80% for work, that's an extra $320 you can depreciate over time.
Actual cost method: when it's worth the effort
If you have a dedicated home office and genuinely high running costs, the actual cost method might give you a bigger deduction. But it demands proper records.
Here's what you need:
- Receipts for everything — electricity, internet, phone bills, stationery, cleaning products
- Work-use percentage — if your home office takes up 10% of your floor space, you can claim 10% of running costs
- A four-week diary — to establish your work-from-home pattern (the ATO accepts this as representative of the full year)
When it makes sense
| Situation | Which method wins? |
|---|---|
| WFH 1-2 days a week | Fixed rate |
| WFH 3-4 days, no dedicated office | Fixed rate |
| Dedicated home office, 4-5 days WFH | Actual cost might win |
| High electricity bills (pool, ducted heating) | Actual cost might win |
| Bought expensive office furniture this year | Fixed rate + separate depreciation |
I'll be honest: for most families, the fixed rate method wins on both simplicity and dollar value. The actual cost method only pulls ahead when you're full-time WFH in a dedicated room with high bills.
Records the ATO actually wants
Here's what will keep you safe if the ATO asks questions:
- A record of every WFH day — calendar entries, a spreadsheet, or a timesheet app. Month-by-month summaries are fine; you don't need minute-by-minute detail.
- One bill per expense type — keep one electricity bill, one internet bill, and one phone bill showing your name. You don't need every single month's bill unless you're using the actual cost method.
- Receipts for big purchases — desk, chair, monitor, laptop. If you're claiming depreciation, keep the receipt.
The ATO has an app called myDeductions that lets you snap photos of receipts and log your WFH hours as you go. It's free and syncs with your tax return.
What you can't claim
A few things trip people up every year:
- ❌ Coffee, tea, and snacks — these are personal expenses, even if consumed during work
- ❌ Kids' school supplies — your printer ink for work is claimable, but the colour ink for your daughter's school project isn't
- ❌ General household cleaning — only the cleaning of a dedicated home office can be claimed (and only under actual cost)
- ❌ Mortgage interest or rent — generally not claimable for employees working from home (different rules apply if you run a business from home)
Two parents, two claims
One of the most common questions I get: "Can my partner and I both claim?"
Yes, you can. But:
- Each person claims their own hours — you can't claim the same hour twice
- Shared expenses (like the home internet bill) can be claimed by both — you don't split it 50/50 unless you use it 50/50
- If you use the fixed rate method, the 67c covers internet/energy/phone — both of you can claim it for your respective hours without worrying about double-counting
My advice for 2025-26
If you worked from home at all this financial year, don't leave this deduction on the table. Start with the fixed rate method — it's what I use myself, and it's what I recommend to most of my clients. Track your hours now while the year is still fresh in your mind, and you'll thank yourself at tax time.
And if you're the kind of person who struggles to keep receipts organised through the year (I see you, parents with three school newsletters in the bottom of the bag), a tool like AusTax AI can keep everything in one place so you're not scrambling in July.
The numbers used in this article are based on the 2025-26 tax year rates. The ATO reviews the fixed rate periodically — always check ato.gov.au for the current rate before lodging.
Frequently asked questions
Can I claim working from home deductions if I only WFH one day a week?
Yes. The ATO doesn't require a minimum number of WFH days. As long as you're working from home to fulfil your employment duties and incurring expenses, you can claim. Just keep a record of the days you worked from home — even if it's only one day a week.
What's the difference between the fixed rate and actual cost method?
The fixed rate method lets you claim 67 cents per hour worked from home, covering energy, internet, phone, and stationery. It's simpler but may give you a smaller deduction. The actual cost method requires you to calculate the real work-related portion of each expense — more paperwork but potentially a larger claim.
Do I need a dedicated home office to claim WFH deductions?
No. You don't need a separate room. Working from the kitchen table or a corner of the lounge room counts. What matters is that you're genuinely working from home, not the setup.
Can both my partner and I claim WFH deductions?
Yes, absolutely. If both of you work from home, each person can claim their own WFH deductions on their individual tax return. Just keep separate records — you can't both claim the same expense.