The 70c Fixed Rate Method Explained (2026–27)

What is the fixed rate method?

The fixed rate method is a way to claim the extra running costs of working from home at a set rate per hour, instead of working out each cost. You multiply the hours you worked from home by the rate, and that is your claim for energy, phone, internet and stationery.

Its formal name is the revised fixed rate method. It is set out in the ATO’s practical compliance guideline PCG 2023/1 and on the ATO fixed rate method page. It replaced the older 52c fixed rate method and the 80c shortcut method from 1 July 2022.

The alternative is the actual cost method, where you work out the real work share of each cost. You use one or the other for your running costs, not both. The guide to fixed rate vs actual cost compares them.

What is the fixed rate for 2026–27?

The rate is 70 cents per hour worked from home. It has applied since 1 July 2024 and applies to 2026–27 unless the ATO amends it (PCG 2023/1, para 26A).

Only the top row matters for your 2026–27 return. The older methods had different rules, including a 4-week sample diary under the 52c method, so advice written for them doesn’t carry over. The WFH rates table keeps the rates and dates in one place.

Who can use the fixed rate method?

You can use it if you work from home to fulfil your employment duties, you incur additional running expenses as a result, and you keep the records it asks for (ATO).

• Real work, not minor tasks. Doing your job at home counts. Taking the occasional call or checking email doesn’t.
• Costs you actually pay. You need to incur extra running costs, such as electricity or internet, because you work at home. If your employer reimburses all of them, there’s nothing left to claim. See employer reimbursements and the WFH deduction.
• The records. A record of actual hours for the whole year, and bills for the costs the rate covers. These are covered below.

You don’t need a separate room or dedicated home office to use the fixed rate method. A desk in the living room works, as long as you’re doing your job there.

What does the 70c rate cover?

The rate covers energy (electricity and gas), phone (mobile and home), internet, and stationery and computer consumables. You can’t claim any of these separately when you use the fixed rate (ATO).

You can still claim, on top of the rate, the decline in value of equipment and furniture you use for work (a desk, chair, computer or monitor) and repairs to it. Read what the 70c covers, and what you can claim on top for the detail and the $300 rule.

What records does the fixed rate method need?

You need a record of the actual hours you worked from home for the whole income year, made at the time, plus at least one bill for each running cost the rate covers. Estimates aren’t accepted (PCG 2023/1, paras 56–62).

The hours record

Since 1 March 2023 the ATO has asked for a record of actual hours, not an estimate and not a 4-week representative sample. Acceptable forms include timesheets, rosters, logs from time-tracking apps, and a diary. The record has to be kept contemporaneously, meaning at the time the work is done (PCG 2023/1, para 58).

A diary you fill in every day works. A spreadsheet you build in June from your calendar doesn’t meet the “at the time” requirement. WFH Diary keeps this record on a Mac by noting when the computer is in use, as it happens, and asking you to confirm each day was at home. The guide to what records the ATO accepts for WFH hours covers the options, including the ATO’s own free myDeductions tool and the free WFH diary template.

The bills

For each running cost the rate covers, keep at least one bill or document showing you paid it: an electricity or gas bill, a phone bill and an internet bill. For stationery and consumables, keep a receipt (PCG 2023/1, paras 56 and 60–62). See bills to keep for the fixed rate method.

How long to keep them

Keep the hours record and bills for 5 years from the date you lodge your return (ATO: records you need to keep).

How do you calculate a fixed rate claim?

Multiply your hours worked from home by 70c, then drop the cents. The ATO’s worked example is 843 hours × 70c = $590.10, claimed as $590 (ATO).

The patterns in the table are illustrations. Your claim uses the hours in your record, which will be different once leave, public holidays and office days are counted. If you’re hybrid, count only the hours worked at home: see claiming office and home days correctly. For what counts within a day, see do breaks, lunch and calls count as WFH hours?

Add the work share of equipment depreciation and repairs on top, and that’s your WFH total. The WFH deduction calculator does the sum.

How does the $1,000 standard deduction affect the fixed rate?

From 2026–27 you get an automatic $1,000 standard deduction for work expenses, reduced dollar for dollar by what you itemise. In effect you get the higher of $1,000 or your itemised work expenses, including your fixed rate claim (ATO).

With no other work expenses, you need about 1,429 hours from home before the fixed rate passes $1,000. That’s around 30 hours a week over 48 weeks. Equipment depreciation and other itemised work costs lower the bar. You can only claim above $1,000 with records for the full amount, so keeping your hours record keeps that option open. The guide to the $1,000 standard deduction vs the WFH fixed rate works through the numbers.

What are the common fixed rate mistakes?

The most common are estimating hours and claiming phone or internet on top of the rate.

• Using a typical week or a 4-week sample instead of a record of actual hours for the whole year.
• Claiming a share of the phone, internet or electricity bill as well as the 70c.
• Having no bill for one of the running costs the rate covers.
• Counting office days or the office half of a split day.
• Using last year’s method or rate, such as 52c or 80c.

For the full picture of WFH claims, start with the work from home tax deductions guide, and check the EOFY WFH checklist before you lodge.