Working From Home Tax Deduction 2026: What You Can Actually Claim
If you work from home, even just one day a week, you’re entitled to claim a deduction. For the 2025–26 income year, the ATO’s fixed rate is 70 cents per hour.
That sounds simple. The part that trips people up isn’t the rate. It’s the records.
The Two Ways You Can Claim
You have two options for claiming working-from-home expenses, and they work very differently.
The fixed rate method is the simple one. You claim 70 cents for every hour you worked from home, and that single rate covers your electricity, internet, phone, and stationery costs.
The actual cost method is more work, but can deliver a bigger deduction. You claim the genuine work-related portion of every expense individually, supported by full records and receipts for each one.
Most people use the fixed rate. It’s simpler, and for most home setups, it gets close enough to the real cost without the extra admin.
What the 70 Cent Rate Covers
The fixed rate is an all-in-one figure. It covers electricity, gas, internet, phone, and stationery, all in that single 70 cents per hour.
Here’s the part people miss: you cannot claim any of those costs again separately. If you use the fixed rate method, your internet bill is already included. Claiming it a second time is double-dipping, and the ATO checks for exactly that.
You can still claim some things on top of the rate. Depreciating assets like your desk, chair, or monitor aren’t covered by the 70 cents, so those can be claimed separately, based on their work-related use.
The Record-Keeping Rule That Actually Matters
This is where most claims fall down. The ATO requires an actual record of the hours you worked from home a timesheet, a diary, or a similar log kept as you go.
An estimate at the end of the year isn’t accepted. “I probably worked from home about three days a week” won’t survive a check.
You also need at least one bill or receipt for each expense category the rate covers one electricity bill, one internet bill, one phone bill, for example even though you’re not claiming those costs individually. The bill proves you actually incurred the expense type at all.
A Worked Example
Say you worked from home for 843 hours across the 2025–26 year, tracked through a timesheet. At 70 cents per hour, that’s a deduction of around $590.
That figure covers your electricity, internet, phone, and stationery for the year, in one combined claim. On top of that, you could separately claim depreciation on a desk or monitor you bought specifically for that home setup.
The Phone and Internet Trap
One detail catches a lot of people out. If you use your mobile phone for work on days you’re not working from home, you can’t claim that usage separately while you’re using the fixed rate method.
The fixed rate is meant to be a complete package for the days you’re actually working from home. If your work phone use happens mostly on days you’re in the office or on the road, the actual cost method might genuinely suit you better, even though it takes more effort.
What to Do Right Now
Start logging your hours today, if you haven’t already. A simple spreadsheet, app, or diary is enough, as long as it’s an actual ongoing record.
Keep one bill for each expense category. You don’t need every bill for the year, just enough to show you genuinely incurred electricity, internet, phone, and stationery costs.
Don’t double-claim. If you’re using the fixed rate, don’t also list internet or phone as separate deductions.
Check whether the actual cost method suits you better, if you have a dedicated home office and detailed bills already. It’s more work, but it can be worth more.
Frequently Asked Questions
What’s the working from home rate for 2025–26? 70 cents per hour, the same rate as the 2024–25 year.
Do I need a dedicated home office to claim it? No. There’s no minimum number of days and no requirement for a separate room working from home for even one day a week qualifies.
Can I claim my laptop separately? Yes. Depreciating assets like laptops, monitors, desks, and chairs aren’t included in the 70 cent rate and can be claimed on top of it.
What happens if I don’t have a record of my hours? Without an actual record, your claim isn’t accepted. Estimates don’t meet the ATO’s substantiation requirement.
Get Your Records Tax-Time Ready Talk to Edulink
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