Work From Home Tax Deduction Calculator AU 2025-26

What this calculator works out

This calculator estimates your work-from-home tax deduction for FY 2025-26 using both ATO methods, with depreciating assets claimed separately on top of either:

• Fixed rate method — 70 cents per hour worked from home, covering electricity, gas, water (heating/cooling), home and mobile internet, home and mobile phone, stationery and computer consumables.
• Actual cost method — work-related portion of every actual running cost.
• Depreciating assets — desk, chair, monitor, laptop, printer (claimable under both methods).

It also estimates the tax saving at your marginal rate.

Numbers come from the ATO working from home expenses page, the fixed rate method page and the actual cost method page. This is a general estimate, not a substitute for professional advice or the ATO myTax pre-fill.

The formula and where the rates come from

Fixed rate method (PCG 2023/1, 70 cents per hour from 1 July 2024):

fixed deduction        = hours worked from home × $0.70
                         (covers electricity, gas, water, internet, phone,
                          stationery, computer consumables — does NOT cover
                          depreciating assets)

Actual cost method:

actual deduction       = utilities × work-use %
                         + internet × work-use %
                         + phone × work-use %
                         + stationery / consumables (work-only)
                         + depreciation on equipment > $300

Depreciating assets (claimable separately under both methods):

if cost ≤ $300         → write off (cost × work%) in full this year
if cost > $300         → annual depreciation = (cost × work%) ÷ effective life

ATO effective lives:

• Laptop / tablet — 2 years
• Desktop computer — 4 years
• Printer — 4 years
• Office chair — 10 years
• Office desk — 20 years
• Monitor — 4 years

Total deduction:

total (fixed)          = fixed rate deduction + depreciating assets
total (actual)         = actual cost deduction + depreciating assets

The recommended method is the larger of the two totals.

How to read the inputs

• Hours worked from home — total hours across the financial year, taken from a timesheet, calendar, roster or diary. From 1 July 2024 you must have an actual record of every hour; the previous "4 weeks representative period" estimate is no longer accepted under the fixed rate method.
• Utilities — annual electricity, gas, water (heating/cooling) cost.
• Internet — annual home internet bill.
• Phone — annual mobile + landline cost.
• Work-use percentages — your work-related share for each category. For internet, this is typically the proportion of work-time use vs personal use (e.g. 50% if half your home internet hours are for work). Be honest — the ATO can ask for diary evidence.
• Stationery & consumables — printer paper, ink, pens, paper notebooks (work-related portion).
• Depreciating assets — chair and laptop are pre-loaded; adjust the cost. Items ≤ $300 deduct in full; items > $300 depreciate over their effective life.
• Marginal tax rate — the rate at which your last dollar of income is taxed. Common values: 16% (under $45k), 30% ($45k-$135k), 37% ($135k-$190k), 45% (over $190k). Add 2% Medicare Levy if applicable.

Worked examples

1. Casual hybrid worker, 600 hours/year, 30% marginal rate. Fixed = 600 × $0.70 = $420. No assets. Tax saving = $420 × 30% = $126.

2. Full-time WFH employee, 1,800 hours/year, $300 chair, $1,800 laptop (90% work, 2-yr life), 30% marginal rate. Fixed = 1,800 × $0.70 = $1,260. Chair = $300 (immediate). Laptop = $1,800 × 90% / 2 = $810/yr. Total fixed = $1,260 + $300 + $810 = $2,370. Tax saving = $2,370 × 30% = $711.

3. Same person using actual cost method. Utilities $2,400 × 30% = $720. Internet $1,200 × 60% = $720. Phone $720 × 50% = $360. Consumables $200. Actual = $720 + $720 + $360 + $200 = $2,000. Plus same depreciation = $2,000 + $1,110 = $3,110. Tax saving = $3,110 × 30% = $933. Actual wins by $222 here, justifying the extra record-keeping.

4. Occasional remote worker, 200 hours/year, no assets. Fixed = 200 × $0.70 = $140. Tax saving at 30% = $42. Probably not worth claiming actual costs at this volume.

5. Self-employed contractor working 100% from home, 1,500 hours, dedicated office. May be able to claim occupancy expenses (rent, mortgage interest, council rates) on a floor-area basis under actual cost — this is not modelled here. Speak to a tax agent because of the CGT implications when you sell the home.

6. Two parents sharing a home office, each 800 hours. Each parent claims 800 × $0.70 = $560 separately. Shared assets like a single laptop must be apportioned (50/50 here) — each claims half the depreciation. The fixed rate is per-person, not per-household.

Common pitfalls

• Forgetting the actual record requirement. From 1 July 2024 you must record every hour worked from home, not estimate from a 4-week sample. Use a calendar, timesheet, or even a recurring 9-5 calendar entry that you adjust for sick days. Without records, the ATO can disallow the entire deduction.
• Double-claiming under the fixed rate. The 70c covers electricity, gas, water, internet, phone, stationery and consumables. You cannot also claim those items separately. Depreciating assets, however, are NOT covered and ARE claimed separately.
• Treating internet as 100% work. The work-use percentage is the proportion of work-related use, not your subjective time at the computer. Streaming Netflix in the evenings reduces your work-use share. Conservative estimates of 30-60% are common.
• Claiming occupancy expenses without a dedicated office. Rent, mortgage interest, council rates and home insurance are only deductible if you have a genuinely dedicated home office (separate room used exclusively for work) AND your employer does not provide a workplace. Most employees cannot claim these, and self-employed claimants face CGT consequences when they sell.
• Forgetting depreciation in subsequent years. A laptop bought for $1,800 (90% work, 2-yr life) gives $810/yr for 2 years. Don't forget to claim it in year 2 as well — many people only claim in year 1 and miss out.
• Using outdated rates. The 70c rate has applied since 1 July 2024. Earlier rates: 67c (Jul 2022 – Jun 2024), 80c shortcut (Mar 2020 – Jun 2022, COVID-only), 52c (pre-2022). Old articles still quote outdated figures.
• Mixing methods within a year. You can use the fixed rate method for one year and actual cost the next, but not switch within a single tax year. Pick one method per year based on which gives the larger total.
• Marginal rate confusion. Tax saving is the deduction multiplied by your marginal rate (the rate on your last dollar earned), not your average rate. A $500 deduction at 30% marginal saves $150, not $75 (which would be at 15% average).

Related calculators

• Take Home Pay Calculator (AU) — see your gross-to-net to estimate your marginal rate.
• HECS-HELP Repayment Calculator — HECS-HELP repayment is calculated on income before WFH deductions.
• Property Depreciation Calculator — depreciation rules for investment property.
• Salary Sacrifice Super Calculator — pre-tax super sacrifice that also lowers marginal rate.
• SAPTO and LITO Tax Offset Calculator — tax offsets that reduce final tax payable.

Sources:

• ATO — Working from home expenses
• ATO — Fixed rate method
• ATO — Actual cost method
• ATO — PCG 2023/1: claiming home office expenses
• ATO — Depreciating assets effective life