The Australian Taxation Office (ATO) has quietly increased the fixed-rate deduction for people working from home.
From 1 July 2024, taxpayers can now claim 70 cents per hour worked from home—up from the previous rate of 67 cents. This change will apply when lodging your 2024–25 tax return.
What Is the Fixed-Rate Method?
The fixed-rate method is a simplified way to claim tax deductions for the additional running costs of working from home. Instead of tracking each individual expense, you can claim a set rate for every hour you work from home.
The 70c/hour rate covers a range of common work-from-home expenses, including:
- Electricity and gas
- Internet and phone usage (mobile and landline)
- Stationery and computer consumables
Note: If you claim a separate deduction for any of these expenses (e.g. your phone bill), you cannot also use the fixed-rate method for them.
Who Can Use the Fixed-Rate Method?
You can claim a deduction using this method if:
- You work from home to carry out your employment or business activities
- You incur additional running expenses as a result of working from home
- You keep proper records to support your claim
Good record-keeping includes:
- A log of hours worked from home (e.g. a diary, timesheet, or roster)
- At least one bill, receipt, or invoice per month or quarter for each relevant expense category
Importantly, you don’t need a dedicated home office to use this method—a shared space like a dining table is fine.
How to Calculate Your Deduction
To work out your total work-from-home deduction using the fixed-rate method:
- Multiply your total hours worked from home during the income year by 70 cents
(e.g. 1,000 hours × $0.70 = $700) - Add any depreciation (decline in value) for work-related items used at home
(e.g. office chair, laptop, desk monitor)
Your total deduction will be the sum of these two amounts.
If the fixed-rate method doesn’t suit your situation, you can choose to use the actual cost method, which involves calculating and claiming each expense individually. However, it requires more detailed records and receipts.
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