Work From Home Tax Deductions in Australia (2026–27 Guide)

Who can claim work from home expenses?

You can claim if you work from home to fulfil your employment duties, you incur additional running expenses because of it, and you keep the records the ATO asks for. All three have to be true, according to the ATO’s working from home expenses page.

“Employment duties” means real work, not minor tasks. Taking an occasional call or checking email after hours doesn’t count. Working your normal hours at the kitchen table on Mondays and Fridays does.

“Additional running expenses” means costs you pay that you wouldn’t otherwise have, such as extra electricity or the work share of your internet. If your employer reimburses all of those costs, you haven’t incurred them yourself, so there’s nothing to claim. The guide to employer reimbursements and the WFH deduction covers partial reimbursements and allowances.

What are the two ways to claim WFH expenses?

There are two methods: the fixed rate method, which pays a set amount per hour worked from home, and the actual cost method, which claims the real work share of each running cost. You claim your running costs one way or the other, not both.

The fixed rate is set out in PCG 2023/1, the ATO’s guideline for the revised fixed rate method, and on the ATO fixed rate method page. The actual cost method needs much more detail. For most employees the fixed rate is simpler and close enough. Read fixed rate vs actual cost to see when the actual cost method can pay more.

What is the WFH fixed rate for 2026–27?

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

Before 1 July 2022 there were two different methods: the old 52c fixed rate method, and the 80c all-inclusive shortcut method used during COVID-19. They had different rules, so don’t mix them up with today’s rate. The WFH rates table lists every rate with its dates, and the 70c fixed rate method explained walks through the method in full.

What does the 70c rate cover?

The 70c rate covers four kinds of running cost: energy (electricity and gas), phone (mobile and home), internet, and stationery and computer consumables. You can’t claim any of those separately when you use the fixed rate, as the ATO fixed rate method page explains.

That rules out the most common double claim: adding a share of your phone or internet bill on top of the hourly rate. It’s already in the 70c. Printer ink, paper and similar consumables are in it too. See what the 70c covers, and what you can claim on top for the full list.

What can you claim on top of the fixed rate?

You can claim the decline in value (depreciation) of equipment and furniture you use for work, such as a desk, chair, computer or monitor, plus repairs to that equipment. These sit outside the 70c rate (ATO).

You claim only the work-use share. An item that costs $300 or less can generally be claimed in full straight away, if you use it mainly for your work as an employee and it isn’t part of a set that together costs more than $300. The ATO page on assets costing $300 or less sets out the tests. Anything dearer is claimed over its effective life as decline in value.

These amounts can make a real difference, especially in a year you buy a new monitor or laptop. The what the 70c covers guide has examples of what does and doesn’t count.

What records do you need for the fixed rate method?

You need a record of the actual hours you worked from home for the whole income year, kept at the time. Estimates and a 4-week sample diary aren’t accepted for the fixed rate method (PCG 2023/1, para 58).

The ATO lists the kinds of record that work: timesheets, rosters, logs from time-tracking apps, or a diary. What matters is that the record shows real hours, day by day, and was made when the work happened, not rebuilt in June from memory. This rule has applied since 1 March 2023.

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

The hard part is remembering to keep the record every day. WFH Diary records the hours your Mac is in use automatically, at the time, and you confirm each day was at home. The ATO’s own free option is myDeductions, inside the ATO app, where you enter your hours yourself. If you prefer paper, there’s a free WFH diary template.

For the details, read what records the ATO accepts for WFH hours. If you’re already behind, forgot to keep a WFH diary? explains what you can still do.

Which bills do you need to keep?

For the fixed rate method you need at least one bill or document for each running cost the rate covers, showing you paid it. For stationery and consumables, keep a receipt (PCG 2023/1, paras 56 and 60–62).

You don’t need every bill for the year, and you don’t work out a percentage from them. The bill shows you actually incur the cost. If a cost type isn’t something you pay, that matters too: the bills to keep for the fixed rate method guide covers shared houses, bills in a partner’s name and other edge cases.

How does the $1,000 standard deduction change WFH claims?

From the 2026–27 income year, people with labour income get an automatic $1,000 standard deduction for work-related expenses. It’s reduced dollar for dollar by the work expenses you itemise, so in effect you get the higher of $1,000 or your itemised claim (ATO standard deduction page).

It came in through the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, which received Royal Assent on 26 June 2026. It doesn’t apply to 2025–26 returns. It’s capped at your labour income, and business (ABN) income doesn’t count towards it. Some deductions sit outside it and are claimed as usual, such as union and professional fees, gifts and donations, the cost of managing your tax affairs and income protection insurance. The ATO page has the full list.

For a WFH claim on its own, the break-even point is about 1,429 hours at 70c (around 30 hours a week over 48 weeks). Any other work expenses you’d itemise, such as equipment depreciation, lower that number.

So do you still need records? You can’t claim more than $1,000 without records for the full amount, and you won’t know until June whether your WFH hours plus other work expenses will pass $1,000. Keeping the diary keeps the option open. The $1,000 standard deduction vs the WFH fixed rate guide works through more cases, and the deduction calculator shows which is higher for you.

How do hybrid workers count their WFH hours?

Count only the hours you actually worked at home. Office days, and the office part of a split day, don’t count towards the fixed rate.

The record has to show actual hours, so a rule of thumb like “3 days a week” isn’t enough on its own (PCG 2023/1, para 58). If you work a morning at home and the afternoon at the office, only the morning goes in. Weeks with leave, public holidays or an extra office day all change the total, which is why estimates drift from the real number.

Read claiming office and home days correctly for split days and changing rosters. Two related questions come up often: do breaks, lunch and calls count as WFH hours? and, if you have more than one employer, how to avoid double-counting hours across two jobs.

How do you work out your WFH claim?

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

1. Add up the hours worked from home for 1 July 2026 to 30 June 2027, from your record.
2. Multiply by 0.70.
3. Add the work share of equipment depreciation and repairs, if any.
4. Compare the total of all your work expenses with the $1,000 standard deduction.

If the rate changes part way through a year, each period uses its own rate. The WFH deduction calculator does the sums and the $1,000 comparison for you.

Where do you put the WFH claim on your tax return?

Work from home expenses go in the other work-related expenses part of your return, as a deduction you itemise (ATO).

From 2026–27 that itemised total is what gets compared with the $1,000 standard deduction. If your total work expenses, including the WFH claim, come to less than $1,000, the standard deduction applies instead. If they come to more, you claim the itemised amount and keep the records for all of it. A tax agent can do this for you, and their fee is one of the deductions that sits outside the standard deduction.

What if you forgot to record your hours?

Start a record now, from today, and don’t estimate the gap. The fixed rate method needs a record of actual hours kept at the time, and an estimate made later isn’t that (PCG 2023/1, para 58).

That doesn’t always mean the missing months are lost. You may already have records that were kept at the time without you thinking of them as a WFH diary: a roster from your employer, timesheets, or logs from a time-tracking tool you use for work. Those can show actual hours. What doesn’t work is rebuilding a year from a rough pattern.

If you can’t show hours for part of the year, you might use the actual cost method instead, which has its own record rules, or you might find the $1,000 standard deduction is the better outcome for 2026–27 anyway. The guide to what you can still do if you forgot your WFH diary goes through each option.

How do you get set up for 2026–27?

The 2026–27 income year runs from 1 July 2026 to 30 June 2027, and you lodge the return for it from July 2027. Getting set up takes four steps.

1. Choose how you’ll record hours. A diary, timesheets, a roster or a time-tracking app all work, as long as the record shows actual hours and is kept as you go.
2. Keep one bill for each running cost. An energy bill, a phone bill, an internet bill, and receipts for stationery. File them as they arrive.
3. Keep receipts for equipment. Note what share of the time you use each item for work.
4. Check in at the end of each month. Fill any gaps while you still remember the days, and look at whether your total is heading past $1,000.

In June, run your hours and other work expenses through the deduction calculator, then use the EOFY WFH checklist to make sure nothing is missing before you lodge.

What are the most common WFH claim mistakes?

The most common mistakes are estimating hours instead of recording them, and claiming phone or internet on top of the 70c rate. Both are easy to avoid.

• Estimating hours. “Roughly 3 days a week” or a typical 4-week sample isn’t a record of actual hours under the fixed rate method (PCG 2023/1).
• Claiming covered costs twice. Energy, phone, internet and stationery are inside the 70c (ATO).
• No bills. You need at least one bill for each running cost the rate covers, and a receipt for stationery.
• Counting office days. Only hours actually worked at home count.
• Claiming reimbursed costs. If your employer pays you back for a cost, you can’t claim it.
• Claiming the full price of dear equipment. Items over $300 are claimed over time, and only the work share (ATO).
• Not comparing with $1,000. From 2026–27, a small itemised claim may be lower than the standard deduction.

Read is the ATO checking WFH claims? for what draws attention, and use the EOFY WFH checklist before you lodge.

Is there an ATO-approved app for WFH hours?

No. The ATO doesn’t approve, certify or endorse record-keeping apps. What it looks at is the record itself: actual hours, kept at the time, for the whole year.

The ATO accepts logs from time-tracking apps as a type of hours record (PCG 2023/1, para 58), but that’s about the kind of record, not any particular app. The ATO’s own free tool is myDeductions. WFH Diary is a Mac menu bar app built for the 70c fixed rate method: it records your hours automatically as you work, and its report lists the hours and the rate for each period. It isn’t affiliated with the ATO. See is there an ATO-approved WFH hours app? and the myDeductions comparison.