Maximise Your Tax Return: Work-from-Home Deductions Explained

Written by Shara Cox & Anna Colley

With flexible work arrangements now part of everyday life, many Australians are working from home either full-time or part-time. But when it comes to tax time, knowing what you can, and can’t, claim can be confusing.

The Australian Taxation Office (ATO) has clear rules on how to calculate work-from-home deductions, and understanding them can make a real difference to your tax return.

Eligibility to Claim Work-from-Home Expenses

To claim work-from-home deductions, you must:

  • Be working from home to fulfil your employment duties (not just occasionally checking emails).

  • Incur additional running expenses as a result of working from home

Two ATO-Approved Methods for Claiming Deductions

1. Fixed Rate Method

Claim 70 cents per hour worked from home. This rate covers:

  • home and mobile internet or data expenses

  • mobile and home phone usage expenses

  • electricity and gas (energy expenses) for heating, cooling and lighting

  • stationery and computer consumables, such as printer ink and paper.

Record-keeping required:

Maintain a diary, timesheet, or work log showing hours worked from home.

2. Actual Cost Method

Claim the actual work-related portion of expenses such as:

  • Electricity and internet bills

  • Office furniture depreciation

  • Technology purchases

Record-keeping required:

Detailed receipts and calculations showing how you determined the work-related percentage of each expense.

What You Can’t Claim

Unless your home is classified as a place of business, you generally cannot claim:

  • Rent or mortgage interest

  • Council rates

  • Home insurance

Common Mistakes to Avoid

  • Using outdated methods (e.g., the 80 cents shortcut method is no longer available).

  • Failing to keep accurate records.

  • Claiming personal expenses as work-related.

Record-Keeping Tips:

  • Use a digital diary or spreadsheet to track hours.

  • Keep all receipts and bills.

  • Note the work-related use of shared expenses (e.g., internet).

How Salt Financial Group Can Help

Work-from-home deductions aren’t always straightforward. At Salt Financial Group, our accountants can help you:

  • Choose the most beneficial method for your situation

  • Ensure compliance with ATO rules

  • Maximise your eligible deductions

Ready to Get Expert Advice?

Contact Salt Financial Group today for tailored tax advice that helps you make the most of your work-from-home setup, while staying compliant and stress-free.

 

Jenni Anderson