Work-from-home tax deductions in 2026-27
If you work from home, you can claim a deduction for the extra costs. Here is how the ATO fixed-rate method works, what it covers, and when the new $1,000 instant deduction is the better option.
Working from home costs you money — extra electricity, internet, phone. The ATO lets you claim some of it back as a tax deduction. For most people the simplest route is the fixed-rate method. Here is how it works in 2026-27.
The fixed-rate method (70c per hour)
Under the fixed-rate method you claim 70 cents for every hour you work from home. That single rate covers energy, phone, internet and stationery — you cannot claim those separately on top. You just multiply your hours by 70c.
What it does and does not cover
The rate covers running costs. It does not cover equipment — a desk, chair, monitor or computer can be claimed separately as depreciation (or in full immediately if the item cost $300 or less). It also does not cover occupancy costs like rent or mortgage interest for employees.
Worked example
Olivia works from home three days a week, about 20 hours, for 46 weeks of the year — 920 hours. At 70c that is a $644 deduction. On her $95,000 salary (a 32% marginal rate), that saves her about $206 in tax. She can also claim the decline in value of the monitor she bought, on top.
Records you must keep
The catch is record-keeping. The ATO requires a record of your actual hours worked from home for the whole year — a diary, timesheet or roster — and estimates are not accepted. You also need at least one bill for each expense the rate covers.
Calculate your WFH deduction
Enter your hours and salary to see your deduction and the tax it saves, for 2026-27.
This is general information, not personal advice. The ATO sets the fixed rate each year; check the current rate before you lodge.
Frequently asked questions
How much can I claim for working from home in 2026-27?
Under the fixed-rate method, 70 cents for each hour worked from home, covering energy, phone, internet and stationery. Your tax saving is that deduction at your marginal rate.
Can I claim my desk and computer as well?
Yes. The 70c rate only covers running costs. Equipment like a desk, chair, monitor or computer is claimed separately as depreciation, or immediately if it cost $300 or less.
What records does the ATO require?
A record of your actual hours worked from home for the entire year — a diary, timesheet or roster — plus at least one bill for each covered expense. Estimates of hours are not accepted.
Should I use the fixed rate or the $1,000 instant deduction?
From 2026-27 you can claim a flat $1,000 for work expenses with no receipts. If your working-from-home claim is under $1,000 and you have no other work expenses, the instant deduction is simpler and gives you more.