Is the ATO Checking WFH Claims?

Is the ATO checking work-from-home claims?

Yes. In April 2026 the ATO said it would focus this tax time on areas where people are likely to make errors, including work-related deductions and expenses, and omitted income. Working from home claims are part of work-related deductions.

The year before, the ATO was more specific. Its 2025 focus areas were work-related expenses, working from home deductions, and multiple income sources. That doesn’t mean every claim is reviewed. It means the ATO pays closer attention to areas where it sees mistakes, and working from home has been one of them.

What are the ATO’s current tax time focus areas?

For tax time 2026, the ATO named two: work-related deductions and expenses, and omitted income. Here is how the last two years compare.

The ATO usually announces its focus areas before each tax time. Your 2026–27 return will be lodged from July 2027, so watch for the 2027 announcement. The rules for working from home claims are the same whatever the focus areas are.

What does the ATO look at in a WFH claim?

The same things it asks for in its guidance. To use the fixed rate method you need to:

• work from home to fulfil your employment duties, not just minimal tasks like occasionally checking email
• incur additional running expenses as a result
• keep a record of the actual hours you worked from home for the whole income year
• keep at least one bill or document for each running expense the rate covers that you incur, and receipts for stationery and consumables

The ATO also reminds people of its basic rules for any work-related claim. In the April 2026 release, Assistant Commissioner Anita Challen said work-related expenses must relate to earning your income, and that you must have spent the money yourself and not have been reimbursed. You also need records to support the claim.

Common errors the rules point to are an estimate of hours instead of a record, claiming phone or internet separately on top of the fixed rate (the rate already covers them), and claiming costs an employer reimbursed. See what the fixed rate covers and employer reimbursements.

How does the ATO check returns?

Mostly with data. As the ABC reported in May 2025, the ATO uses data matching and analytics, drawing on information from sources such as banks, state revenue offices, land titles offices and motor vehicle registries. The ATO said more than 584,000 individual tax returns were adjusted through its data matching programs for 2024 lodgments, including by removing overstated deductions.

It also prompts people while they lodge. The ATO’s Rob Thomson told the ABC the ATO will ask people to look at their claims and “nudge them to check it” as they lodge. A prompt isn’t an accusation. It’s a chance to check the number before you submit.

The ATO doesn’t publish a list of what makes it review a particular return, and it would be guessing to say a certain dollar amount triggers one. What you control is whether your claim is right and whether you can back it up.

What happens if I can’t back up my WFH claim?

The ATO can reduce or remove the claim, and you may have to pay back the tax it saved you. That’s what “removing overstated deductions” means in practice.

The ATO’s general advice is plain: if you don’t have the records, don’t claim the expense. For the fixed rate, the record that matters most is the hours. Since 1 March 2023, the ATO has asked for a record of actual hours for the full year. An estimate, or a four-week sample diary, isn’t accepted for the fixed rate (see PCG 2023/1).

The ATO has also warned that incorrect claims based on bad advice “can also lead to significant penalties”, and that you stay responsible for what you put in your return, even if the information came from a friend, a website or an AI tool.

What if I’ve already claimed something wrong?

Fix it. In the April 2026 release, the ATO said that if you overclaimed in past years you should lodge an amendment, or ask your tax professional to amend the claim. The ATO said that getting it right upfront prevents delays, incorrect claims and the need for amendments or compliance action.

If you’re not sure whether an old claim was right, a registered tax agent can review it with you.

How do I make my claim easy to support?

Keep the records the method asks for, as you go. A tidy claim needs:

• An hours record kept at the time. Timesheets, rosters, a time-tracking app’s logs or a diary are all accepted forms (PCG 2023/1 para 58). See the ATO’s WFH record rules.
• A total you can explain. If your hours went up a lot from last year, know why: a new role, more days at home, a second job.
• The bills. At least one for each running cost the rate covers that you incur. See which bills to keep.
• No double claiming. Phone, internet, energy and stationery are inside the 70 cents.
• Records for five years from the date you lodge.

An automatic tracker can make the hours part easier. WFH Diary, for example, records when your Mac is in use as it happens, and you confirm each day was at home. The record is still yours to check, and the ATO doesn’t approve or endorse any record-keeping app.

Does the $1,000 standard deduction change this?

It changes who needs to itemise. From 2026–27, a $1,000 standard deduction applies automatically to people with labour income. It’s reduced by the work-related expenses you itemise, so in effect you get the higher of $1,000 or your itemised expenses. If you itemise above $1,000, you need records for the full amount.

If your work expenses come to less than $1,000, the standard deduction may suit you better, and there’s no itemised WFH claim to support. If they come to more, the usual record rules apply. See the $1,000 standard deduction vs the fixed rate, or check the ATO’s working from home page for the methods.