What is the ATO's work from home deduction rate for 2025-26?

The ATO's fixed-rate work-from-home method is 70 cents per hour for 2025-26. This is confirmed in the ATO's myTax 2026 instructions. The rate bundles in electricity, gas, internet, phone and stationery — you cannot also claim those items separately. You can claim depreciation on home office equipment (desk, chair, monitor, laptop) in addition to the 70c rate.

What records do I need to claim the 70c WFH deduction?

You need a record of the total number of actual hours worked from home for the full income year — maintained throughout the year, not estimated at tax time. Acceptable formats include timesheets, rosters, diary entries, work calendars, or the ATO's myDeductions app. You also need at least one bill per expense type included in the 70c rate (e.g. one electricity bill, one internet statement). An estimate written at tax time is explicitly not acceptable to the ATO.

Can I claim my phone and internet separately if I use the 70c WFH method?

No. The 70c fixed rate already includes phone, internet, electricity, gas, stationery and computer consumables. If you use the fixed-rate method, you cannot also claim these expenses separately anywhere else in your return. Doing so is double-claiming and is one of the ATO's top audit triggers for WFH deductions.

What is the actual cost method for WFH deductions?

The actual cost method requires you to calculate the genuine work-related share of each actual expense (electricity, internet, phone, depreciation, etc.) and keep full receipts and apportionment records. It's more complex than the 70c fixed rate but can produce a larger deduction for people with very high running costs, a dedicated home office room, or who work full-time from home. A tax agent can model both methods to determine which gives you a better deduction.

What is the new $1,000 standard work-related expense deduction?

Draft legislation released by Treasury on 20 April 2026 proposes a standard work-related expense deduction of up to $1,000 with no receipts required. However, this change applies from 1 July 2026 — affecting 2026-27 returns lodged in 2027. It does NOT apply to your 2025-26 return. For the current return, the 70c fixed-rate method with full records is the applicable rule.

Evidence-backed. Sourced from the ATO, H&R Block, WiseLink Accountants, COSCA, ABC News and MySuperTax. General information only — not financial or tax advice. Your deduction entitlements depend on your specific circumstances. Consult a registered tax agent. Last updated: June 2026.

⚡ Key Takeaways

The ATO’s fixed-rate working-from-home method is 70 cents per hour for the 2025–26 income year. This is confirmed in the ATO’s myTax 2026 instructions: “Use the fixed rate method to claim a rate of 70c per hour you worked from home for 2025–26.” ^[1][2]
The 70c rate is bundled — it already covers electricity and gas, internet and data, mobile and home phone usage, and stationery and computer consumables. You cannot also claim those same items separately elsewhere in your return. Double-claiming is one of the ATO’s top audit triggers for WFH deductions. ^[4][6][1]
You can claim these expenses in addition to the 70c rate: decline in value (depreciation) of office furniture and equipment (desk, chair, monitor, laptop); repairs and maintenance of those assets; and cleaning costs for a dedicated home office. ^[3][4][1]
The ATO requires contemporaneous records of actual hours worked from home — maintained throughout the year, not reconstructed at tax time. A guess or a year-end estimate is explicitly not acceptable. Acceptable records include timesheets, rosters, diary entries, work calendars or the ATO’s myDeductions app. ^[4][3][1]
The alternative is the actual cost method: calculate the genuine work-related share of each actual expense and keep receipts and apportionment records. This is more complex but can produce a larger deduction for heavy WFH users with high electricity, data or dedicated office space costs. ^[7][3]
From 1 July 2026 (not applicable to the 2025–26 return lodged now): draft legislation proposes a standard deduction of up to $1,000 for work-related expenses — no receipts needed for amounts below that threshold. This is a future change; it does not affect your 2025–26 return. ^[8][9]

Work From Home Tax Deduction 2026: The 70c Rule, What It Covers and How to Claim It

By The Fine Print editorial team | Last updated: June 2026 | 10 min read | ⚠️ Not financial advice

The ATO’s work-from-home deduction has quietly become one of the riskiest claims in the Australian tax system — not because the rule is complicated, but because most people misapply it. The fixed rate is 70 cents per hour for 2025–26, it bundles in your phone, internet and power, and it requires a year-long record of actual hours. Get any of those three things wrong and your deduction is either inflated (and vulnerable to adjustment) or understated (and you’re paying more tax than you need to). Here’s exactly how it works.

📋 What’s in This Guide

The 70c rate — what it covers and what it doesn’t
The record-keeping requirement the ATO is strict about
The actual cost method — when it’s worth the extra work
The double-claiming trap
The standard deduction coming from 1 July 2026 (not this return)
Three actions before you lodge
Frequently asked questions

The 70c Rate — What It Covers and What It Doesn’t

The ATO’s fixed-rate method allows you to claim 70 cents for every hour you worked from home during 2025–26. This figure is confirmed in the ATO’s own myTax 2026 instructions and has been the rate for both 2024–25 and 2025–26. The rate replaced the old 52c (pre-2022) and the temporary COVID shortcut of 80c per hour (which ended 30 June 2022). ^[1][11][10]

What the 70c rate already includes (cannot claim separately):

Electricity and gas (the power you use running your computer, heating, lighting while working)
Internet and data costs (your home broadband, NBN or mobile data)
Mobile and home phone usage costs
Stationery and computer consumables (paper, printer ink, USB drives)

What you can still claim on top of the 70c rate:

Decline in value (depreciation) of home office assets: desk, chair, monitor, keyboard, webcam, laptop (if you purchased it and it’s not covered by your employer). Claimed via a depreciation schedule or the low-value asset write-off if under $300.
Repairs and maintenance of those depreciable assets
Cleaning costs for a dedicated home office — a room set aside exclusively for work, not a dining table or bedroom you also use personally

The practical implication: if you use the 70c method, your WFH claim has two parts — the hourly rate calculation (70c × total hours), plus any separate asset depreciation or cleaning claims. Nothing else. ^[3][4][1]

The Record-Keeping Requirement the ATO Is Strict About

This is where the majority of WFH claims go wrong. The ATO’s requirement is explicit and non-negotiable: you must keep a record of the total number of actual hours you worked from home for the whole income year — and this record must be maintained throughout the year, not reconstructed at tax time. ^[4][3][1]

⚠️ The ATO is explicit: an estimate written at tax time is not acceptable. If you cannot show a contemporaneous record of hours across the full year, the ATO may reject or significantly reduce your WFH claim — even if you genuinely did work from home for those hours. The burden of proof is yours. Tax agents and ATO messaging in 2026 list WFH claims without proper records as one of the top four audit triggers. ^[4][5][3]

Acceptable record formats for tracking WFH hours include: timesheets from your employer; rosters or schedules showing WFH days; a diary with daily entries; a calendar (Google Calendar, Outlook, Apple Calendar) with WFH entries; the ATO’s own myDeductions app (which has a WFH hours tracker); or any other digital log that captures actual hours with date entries. ^[13][3][1]You must also keep at least one bill or statement for each type of expense bundled into the 70c rate — for example, one electricity bill showing your name (or your household’s) and one internet account statement. You don’t need to itemise every bill, but you need at least one document per expense category to demonstrate the expenses exist. ^[4][1]

💡 Share households: If you rent a shared house or flat, your bills may be in a housemate’s name. You’ll need to keep evidence that you personally contributed to these costs — for example, a transfer to your housemate for your share of the power or internet, or a written cost-sharing arrangement. The ATO’s guidance notes this specific scenario. ^[13][1]

The Actual Cost Method — When It’s Worth the Extra Work

The fixed-rate method (70c/hour) is simpler but not always the best option. The actual cost method requires you to calculate the genuine work-related share of each expense and keep full receipts and apportionment records. It can produce a larger deduction when: ^[7][3][10]

You have very high electricity costs (e.g. an air-conditioned home office, multiple monitors, electric heating)
You have a large data allowance or expensive internet plan specifically needed for work
You have a genuinely dedicated home office (a room used only for work), which allows you to claim a percentage of rent, mortgage interest or occupancy costs — an option not available under the fixed-rate method
Your actual costs exceed what 70c × your hours would produce

The trade-off: actual cost requires you to keep every receipt, apportion each expense between private and work use, and calculate percentages. It’s more work but can be significantly more rewarding for heavy WFH users. A tax agent can model both methods and tell you which gives a better outcome for your specific circumstances. ^[7][10]

The Double-Claiming Trap

The single most common mistake under the 70c fixed-rate method is also claiming phone, internet or power expenses separately elsewhere in the return. The 70c rate already includes these costs — if you also claim your internet bill under “other work-related expenses” or your phone plan under “phone and internet,” you are double-claiming. ^[6][4][1]The ATO’s LinkedIn post is unambiguous: “The work from home fixed rate is 70 cents per hour … this covers electricity, gas, phone, internet, stationery, and computer consumables — and you cannot claim those separately.” Tax practitioners note this is one of the top error types in WFH returns and one of the categories explicitly mentioned in ATO audit focus materials for 2026. ^[6][4][5]

The Standard Deduction Coming from 1 July 2026 (Not This Return)

On 20 April 2026, Treasury released draft legislation to introduce a standard work-related expense deduction of up to $1,000 for eligible Australian tax residents with work income — with no receipts required for amounts below the threshold. This proposal is intended to simplify small claims. ^[8]However, this change applies from 1 July 2026 onwards — affecting 2026–27 returns, lodged in 2027. It has no effect on your 2025–26 return, which you lodge now. For the return you are preparing, the 70c fixed-rate method with full records applies as described above. ^[8][9]

💡 A word of caution for future years: When the standard deduction arrives in 2026–27, it may cause some taxpayers to stop keeping records — even when their real WFH costs exceed $1,000. If you work from home substantially, your actual deduction (70c × hours + depreciation) will almost certainly exceed $1,000. Abandoning records because “the standard deduction covers it” could cost you hundreds of dollars per year. Keep your WFH log going. ^[9][8]

✅ Three Actions Before You Lodge

Action 1: Choose your method deliberately — fixed rate or actual cost

Don’t default to the 70c rate without checking whether the actual cost method would give you a better deduction. If you worked from home heavily, have high electricity costs, or have a dedicated home office room, ask your tax agent to model both methods. For most workers with moderate WFH — say 2–3 days per week — the 70c fixed rate is convenient and adequate. For someone working full-time from home with high running costs or a dedicated room, the actual cost method may produce a deduction significantly higher than the fixed rate. The calculation is: (70c × total annual WFH hours) + depreciation on equipment. Compare that to the actual cost method output and choose the higher one. Commit to one method per return — you can’t switch mid-return. ^{[1][3][7][10]}

Action 2: Start (or back up) a real WFH hours log — and keep it current

If you’ve been tracking hours all year, excellent — consolidate those records now and count the total hours. If you’ve been working from home regularly but haven’t been logging hours, start immediately and for the remainder of the financial year create as complete a record as possible from your work calendar, rosters or employer timesheets. For next year, use the ATO’s myDeductions app (free, in the ATO app), a spreadsheet, or set up a recurring calendar entry that tracks your WFH days and hours. The ATO’s position is that a contemporaneous record is required — something maintained throughout the year, not reconstructed at tax time. If you truly cannot support your hours claim, reconsider whether the actual cost method (which has its own evidence requirements) is a better option. ^{[13][3][4][1]}

Action 3: Bundle your bills and track your equipment separately

For your 70c claim: make sure you have at least one bill in your records for each expense type bundled into the rate — one electricity or gas bill (in your name or your household), one internet account statement. These don’t need to itemise work vs private use; they just need to show the expense exists. Do not also claim these bills separately elsewhere in your return. For your equipment claim (separate from the 70c rate): list every piece of home office equipment you purchased during 2025–26 that is used for work — desk, chair, monitor, keyboard, webcam, laptop, headphones. For items under $300 used wholly for work, you can claim the full cost immediately. For items $300+, you claim depreciation over the effective life. Keep the receipts and note the work-use percentage if the item is also used privately. This “equipment on top” claim is legitimate, commonly missed, and completely separate from the bundled 70c rate. ^{[13][3][1][4]}

❓ Frequently Asked Questions

What is the WFH deduction rate for 2025-26?

70 cents per hour — covering electricity, gas, internet, phone, stationery and consumables. You cannot separately claim those items. Depreciation on office equipment can still be claimed on top. ^[1][2]

What records do I need?

A contemporaneous log of actual hours worked from home for the full year (diary, timesheet, calendar, myDeductions app) — maintained throughout the year, not estimated at tax time. Plus at least one bill per expense type bundled into the 70c rate. ^[4][3]

Can I claim phone and internet separately as well?

No — those are already inside the 70c rate. Claiming them separately on top is double-claiming and is one of the ATO’s top WFH audit triggers. ^[6][4]

Does the new $1,000 standard deduction apply this year?

No — that change applies from 1 July 2026 (2026-27 returns). For your 2025-26 return lodged now, the 70c rate with full records applies. ^[8][9]

⚖️ The Fine Print Verdict

The 70c WFH rate is genuinely useful — it simplifies a complex calculation into one hourly figure. But the simplicity is a trap for anyone who assumes it works like the old COVID shortcut (which needed minimal records) or who tries to layer additional claims on top of it. The ATO’s 2026 focus on WFH deductions is driven by exactly these two mistakes: people who claim phone and internet separately on top of the 70c rate, and people who can’t produce hourly records when asked. Both of those mistakes are avoidable. Log your hours in real time. Keep one bill per expense type. Don’t double-claim. And if you’re a heavy WFH user, have a tax agent check whether the actual cost method would save you more money — the $1,000 standard deduction coming from July 2026 might make you want to stop keeping records, but for most serious home-office workers it will leave hundreds on the table.

👉 70c/hour, contemporaneous log, no double-claiming. Pick your method, keep your records, claim your equipment depreciation on top.

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📚 Sources & References

ATO, “Other work-related expenses — myTax instructions 2026,” ato.gov.au/individuals-and-families/your-tax-return/instructions-to-complete-your-tax-return/mytax-instructions/2026/deductions/work-related-expenses/other-work-related-expenses
ATO, “What’s new for individuals,” ato.gov.au/individuals-and-families/your-tax-return/before-you-prepare-your-tax-return/what-s-new-for-individuals
ATO, “Working from home expenses,” ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/working-from-home-expenses
WiseLink Accountants, “Tax return Melbourne 2026 — ATO focus areas,” wiselinkaccountants.com.au/zh-hans/tax-return-melbourne-2026-ato-focus-areas/
ABC News, “Tax time 2026: ATO warns millions of Aussies on deduction claims,” abc.net.au/news/2026-06-02/tax-time-2026-ato-warns-millions-of-aussies-claim-tax-deductions/106732166
ATO LinkedIn, “The work from home fixed rate is 70 cents per hour,” linkedin.com/posts/australian-taxation-office_the-work-from-home-fixed-rate-is-70-cents-activity-7325728515180351489-PVUH
COSCA, “Home office expenses — what you can claim and ATO requirements in 2025,” cosca.com.au/learn/home-office-expenses-what-you-can-claim-and-ato-requirements-in-2025/
ATO, “Standard deduction for work-related expenses,” ato.gov.au/about-ato/new-legislation/in-detail/individuals/standard-deduction-for-work-related-expenses
Vlassisco, “TaxWise News — Individual Edition May 2025,” vlassisco.com.au/wp-content/uploads/2025/05/TaxWise-News-Individual-Edition-May-2025.pdf
H&R Block, “Work from home update,” hrblock.com.au/tax-academy/work-from-home-update
ATO, “New working from home shortcut,” ato.gov.au/media-centre/new-working-from-home-shortcut
ATO, “TR 93/30 — income tax: home office expenses,” ato.gov.au/law/view/pdf?DocId=TXR%2FTR9330
CKSaksens, “ATO tax update 2026 — 70c WFH fixed rate and digital diary rules explained,” cksaksens.com/global/en-au/ato-tax-update-2026-new-75c-wfh-fixed-rate-digital-diary-rules-explained/
AnyDayAnyTax, “Home office calculator,” anydayanytax.com.au/au/home-office-calculator
MySuperTax, “Individual tax guide Australia 2026,” mysupertax.com.au/blog/individual-tax-guide-australia-2026/

This article is general information only and does not constitute financial or tax advice. Your deduction entitlements depend on your specific employment arrangements, expenses and records. Consult a registered tax agent for advice tailored to your situation. The Fine Print 🇦🇺 is not affiliated with the ATO or any firm mentioned.

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