With remote work now firmly established as the new norm across many industries, understanding how to correctly claim your working-from-home (WFH) expenses has become an essential part of managing your tax affairs. Whether you’re a PAYG employee, a sole trader, or a business owner, getting your deductions right could lead to meaningful savings come tax time.

At A Plus Accountant, we specialise in guiding Australians through tax-efficient structuring—including helping you maximise eligible deductions when working from home. This guide breaks down the 2024–25 financial year rules in simple terms, so you know exactly what you can and can’t claim.

Two Key Methods for Claiming Home Office Expenses

The ATO offers two primary options for calculating your WFH deductions. The best choice depends on the nature of your work, your documentation, and how much time and money you’ve spent setting up your workspace.

Fixed Rate Method – 67 cents per hour

The fixed-rate method is designed for simplicity. From 1 July 2024, you can claim 67 cents for every hour you work from home. This flat rate covers a bundle of running costs, including:

  • Electricity and gas bills
  • Internet usage for work
  • Mobile and home phone expenses
  • Stationery and computer consumables (like paper or printer ink)

It’s worth noting that this method doesn’t allow you to include depreciation on big-ticket items such as your computer, chair, desk or other equipment. If you’ve recently invested in setting up your home office, you’ll need to claim those purchases separately.

What records do you need for the Fixed Rate Method?

You’ll need a full record of all hours worked from home to use this method. The ATO will expect consistent evidence—this could be a timesheet, a digital calendar, or a spreadsheet you update regularly. You’ll also need receipts or statements for the types of expenses that are covered by the 67c hourly rate.

Actual Cost Method for WFH Expenses

This method is more detailed but can often lead to a bigger tax deduction—especially if your WFH setup has higher-than-average expenses. Instead of relying on a flat hourly rate, you’ll calculate the precise portion of each expense related to your work.

You can claim a percentage of the following:

  • Power and internet bills
  • Cleaning costs for your dedicated home office
  • Mobile and landline phone use for work
  • Depreciation on items like your office chair, computer, or printer

For this method, the ATO expects thorough documentation. That includes not just receipts and invoices but also working notes showing how you’ve calculated the business-use portion of each expense.

Actual Cost Method Example Calculation

Example: If your internet bill is $100 a month and you use 60% of that time for work, only $60 per month is deductible. Multiply that by the number of months you worked from home during the financial year for your total claim.

What You Can’t Include in Your WFH Claim

Even with the best intentions, there are certain expenses the ATO considers private or already covered. These can’t be included in your claim, regardless of which method you use:

  • Tea, coffee, milk, and snacks—even if they’re part of your daily work routine
  • Rent or home loan interest (unless your home is also your principal place of business, which applies to very few people)
  • Any equipment or supplies that your employer has provided or reimbursed you for

These exclusions help maintain a clear distinction between personal and work-related costs.

Tips to Stay on Track with WFH Record-Keeping

Accurate record-keeping isn’t just important—it’s non-negotiable. The ATO continues to tighten compliance around WFH claims, so you need to be ready to back up your deductions if questioned.

Here are a few practical suggestions:

  • Track hours consistently: Keep a running log of your hours worked from home throughout the year. Avoid estimating or rounding—accuracy is key.
  • Use digital tools: Tools like Google Calendar or specialised apps can help automate your record-keeping and make it easier to stay organised.
  • Keep your receipts: Store digital or physical copies of internet bills, phone invoices, stationery purchases and any equipment you’ve bought. A shared cloud folder or finance app can make this easier to manage.

A little discipline now can save you a lot of time and potential stress later—especially if the ATO decides to review your return.

Choosing the Right WFH Expense Claim Method

So, which method is best for you?

If you only work from home occasionally or you’d prefer a hassle-free option, the fixed rate method might be the right fit. It requires fewer calculations and minimal evidence beyond timesheets and receipts.

On the other hand, if you’ve spent significant time working from home and have invested heavily in your workspace, the actual cost method may allow you to claim a higher deduction. Yes, it’s more work, but it could pay off in the form of a larger refund or reduced tax liability.

Whichever path you choose, keep in mind that consistency matters. You can’t switch between methods within the same financial year, so it’s important to commit to one approach early and stick with it.

Maximise Your WFH Claims with Professional Support

Home office deductions might seem straightforward, but the devil is in the detail. Making small errors—like miscalculating usage percentages or overlooking depreciable assets—can result in missed opportunities or potential flags with the ATO.

At A Plus Accountant, we help individuals and businesses across Australia make informed decisions about their tax affairs. If you’re unsure which method will work best for your situation—or if you’re simply after peace of mind—reach out to our team. We’ll help ensure your working-from-home expenses are correctly documented and fully optimised so you can focus on what you do best.