If you work from home, the ATO revised fixed rate method is the simplest way to claim your running expenses.
Fixed Rate Method (2025-26)
The fixed rate is 70 cents per hour worked from home (up from 67 cents in 2024-25). This rate covers:
- Energy expenses (electricity and gas)
- Phone (home and mobile) and internet expenses
- Internet and data connectivity
- Stationery and computer consumables
What You Can Claim Separately
In addition to the 70 cents per hour, you can separately claim:
- Depreciation of assets: Computers, desks, chairs, office furniture (for the decline in value)
- Cleaning costs: If you have a dedicated home office area
Record-Keeping Requirements
To use the fixed rate method, you must keep:
- A record of the actual number of hours worked from home (diary for 4 representative weeks, or electronic records)
- Receipts for any assets you are claiming depreciation on
- Records showing the work-related use of assets
Important: You must have a genuine basis for your hours claim ??? the ATO is cracking down on unreasonable claims.
New $1,000 Standard Deduction (from 1 July 2026)
The Australian Government has introduced a new standard deduction of up to $1,000 for work-related expenses from 1 July 2026. This is not specific to work-from-home ??? it applies to all work-related expenses. However, it does not replace the fixed rate method for home office claims.
Actual Cost Method
You can still use the actual cost method if it gives you a better result, but you must keep receipts and records for all expenses claimed. The ATO expects you to apportion expenses between work and private use.