How we work it out
The ATO's fixed rate method gives one blended rate for every hour you actually work from home, currently 70 cents, the confirmed rate for both the 2024–25 and 2025–26 income years (the 2026–27 rate hadn't been published at time of writing). Multiply your weekly hours by the weeks you worked from home for a yearly hours total, then multiply that by 70 cents for the deduction. We then value that deduction at your own marginal tax rate, since a deduction only saves you tax at whatever rate applies to your top dollar of income, not at its full face value.
Worked example: 20 hours a week working from home, 48 weeks a year (52 weeks minus four weeks' leave): 20 × 48 = 960 hours × 70¢ = a $672 deduction. At a 30% marginal rate, that's roughly $202 off what you'd otherwise owe, excluding the 2% Medicare levy.
What the 70 cents covers, and what it doesn't
The rate is a single blended figure standing in for four running costs: electricity and gas for heating, cooling and lighting; home and mobile internet or data; phone usage; and stationery or computer consumables like printer ink and paper. It doesn't cover the decline in value of a laptop, monitor, desk or chair used for work, repairs to that equipment, or occupancy costs like rent, mortgage interest and home insurance, which are only deductible in narrow circumstances using a separate actual cost method. Equipment is still claimed, just as its own line via depreciation, not folded into the 70-cent rate. See our computer running cost calculator for what that hardware costs to actually run, on top of what it's worth to depreciate.
The record you actually need to keep
Since 1 March 2023, the ATO requires a record of your actual hours worked from home for the whole income year, not an estimate. A timesheet, roster, regular diary note or a time-tracking app all count. You also need at least one record showing you incurred each expense type the rate covers, one phone bill and one power bill, say, rather than every bill all year. A dedicated home office isn't required to use this method, unlike the older actual cost method.
What changes from the 2026–27 income year
From the 2026–27 income year, the one now underway, the ATO automatically applies a $1,000 standard deduction for work-related expenses, no receipts or hours diary needed. It doesn't apply to the 2025–26 return most people are lodging right now. Once it starts, it works as a straight choice: take the automatic $1,000, or itemise your actual expenses, including this working-from-home figure, if the real total genuinely comes to more. There's no stacking the two. Practically, that means a working-from-home deduction under $1,000 on its own achieves nothing extra over just taking the automatic amount, unless other work expenses, tools, union fees, a uniform, push the combined total past $1,000, at which point itemising everything, with full records, is what actually pays.
Common questions
What is the ATO's working-from-home rate right now?
70 cents for every hour actually worked from home, the confirmed rate for the 2024–25 and 2025–26 income years.
Do I need a dedicated home office to claim it?
No. The fixed rate method doesn't require a separate work-only room, unlike the older actual cost method.
Can I still claim my laptop or desk on top of this?
Yes. Equipment and furniture are claimed separately as depreciation, since they aren't included in the 70-cent rate.
What does the ATO's new $1,000 standard deduction change?
From the 2026–27 income year, the ATO automatically applies a $1,000 deduction for work-related expenses with no records needed. It's a choice, not a top-up: take the automatic $1,000, or itemise your real total, including this working-from-home figure, only if it genuinely comes to more.
Sources
Electricity rates: AER Default Market Offer (NSW, SA, south-east QLD), Victorian Default Offer, and each remaining state's regulated tariff, current for 2026–27. Appliance figures: the energyrating.gov.au registration database (July 2026 snapshot). Methods and assumptions are described on each page.