By Joshua Occhino, Co-founder, Ezyiah
Short answer: For the 2024–25 and 2025–26 income years, the ATO's working from home fixed rate is 70 cents per hour worked from home. It covers energy, internet, phone, stationery and computer consumables, so you can't claim those separately as well. You need a record of the actual hours you worked from home across the whole year. From the 2026–27 income year, eligible employees automatically receive a new standard deduction of up to $1,000 for work-related expenses. It's reduced dollar for dollar by work-related expenses you claim, including working from home expenses, so many people will be better off taking the $1,000 and not claiming WFH separately.
What is the 70c fixed rate, and what does it cover?
Under the ATO's fixed rate method, you multiply the hours you worked from home by the rate:
| Income year | Fixed rate per hour |
|---|---|
| 2022–23 and 2023–24 | 67 cents |
| 2024–25 and 2025–26 | 70 cents |
| 2026–27 | Not yet published by the ATO |
The rate covers additional running expenses: electricity and gas for heating, cooling and lighting, internet, mobile and home phone, and stationery and computer consumables. You can't claim those again separately.
You can claim separately the work-related decline in value of depreciating assets such as desks, chairs and computers, plus their repairs, apportioned for private use. For example, 843 hours × 70c = $590 for 2025–26, plus any depreciation.
What records do you need?
- A record of actual hours worked from home for the whole year, kept as you go: timesheets, rosters, a diary or similar. Estimates and four-week samples aren't accepted.
- At least one bill or document for each running expense the rate covers, such as an electricity bill or phone bill, to show you incurred it.
- Receipts and apportionment for any depreciating assets you claim.
What about the actual cost method?
The actual cost method claims the real work-related portion of each expense. It takes more records, but it can give a bigger deduction for people with a dedicated home office or high running costs. Work out both if the numbers are close.
What is the new $1,000 standard deduction?
From the 2026–27 income year, the ATO's standard deduction for work-related expenses (also called the instant tax deduction) gives eligible taxpayers up to $1,000 without needing to have spent the money or kept records. It is not available for 2025–26 tax returns.
- It applies automatically to Australian residents who earn assessable labour income, such as wages.
- The maximum is the lower of $1,000 or your assessable labour income.
- It's reduced dollar for dollar by work-related expenses you claim that it covers, including working from home, car, stationery and uniform expenses.
So if your total work-related expenses, including WFH, are under $1,000, you'll generally be better off claiming nothing and taking the standard deduction. If they're over $1,000, claim the actual amounts and keep the records. The ATO's draft guidance is in Draft LCR 2026/D5.
What mistakes does the ATO look for?
- Double-dipping: claiming the 70c rate and also claiming internet or electricity separately.
- No hours record, or hours reconstructed at tax time.
- No private-use apportionment on shared internet or equipment.
- Occupancy expenses (rent, mortgage interest, rates, insurance), which employees generally can't claim just because they work from home.
How Ezyiah helps sole traders
For sole traders and small businesses, Ezyiah is an AI bookkeeper that keeps business expenses reconciled from live bank feeds, with receipts matched to transactions and split transactions for mixed use. That makes the evidence for business deductions easy to find at tax time. Ezyiah doesn't prepare individual tax returns. Your accountant or tax agent does that.
See Ezyiah for business owners.
Frequently asked questions
What is the working from home rate for 2025–26?
70 cents per hour, under the fixed rate method.
Can I claim the $1,000 standard deduction in my 2025–26 return?
No. It first applies to 2026–27 tax returns.
Can I claim internet separately with the 70c rate?
No. Internet is covered by the fixed rate.
Do I need receipts for the $1,000 standard deduction?
No records are needed to receive the standard deduction itself, but if you claim work-related expenses instead, you need records for them.
