A worked example
Melissa works as a graphic designer in Brisbane and spent three days a week at home during the 2025-26 financial year. She tracked 312 hours of actual work-from-home time across the year.
Using the fixed rate method, Melissa calculates: 312 hours × $0.70 = $218.40.
Her total deduction is $218.40. This covers her electricity for heating, cooling and lighting, plus the decline in value of office furniture and her phone and internet costs.
Melissa also bought a new office chair for $450 and a monitor for $680 during the year. Because the fixed rate already covers furniture decline, she can't claim the chair separately. But she can claim a separate deduction for the monitor under the computer equipment category (depreciated over its effective life, or claimed outright if it costs less than $300).
She keeps a simple spreadsheet showing the dates and hours worked from home. She doesn't need a dedicated home office room to use this method, just a record proving she actually worked those hours at home.
State-by-state differences
The ATO fixed rate method applies identically across all Australian states and territories. Your location in NSW, VIC, QLD, WA, SA, TAS, ACT or NT makes no difference to the 70 cents per hour rate or what it covers.
- NSW, VIC, QLD: No state-based variations. Use the same ATO rate regardless of whether you're in Sydney, Melbourne or Cairns.
- WA, SA: Electricity costs vary significantly between states, but the fixed rate doesn't adjust for this. Perth and Adelaide residents get the same 70c rate even though energy prices differ.
- TAS, NT: Remote and regional workers follow identical rules. The fact you're working from Hobart or Darwin doesn't change your entitlement.
- ACT: Public servants working from home use the same method as private sector workers.
- Income brackets: The deduction reduces your taxable income, so someone on the 37% marginal rate saves more tax per dollar claimed than someone on 19%. A $200 deduction saves $74 for a higher earner versus $38 for a lower earner.
Common mistakes people make
- Claiming the fixed rate plus separate phone and internet bills. The 70c rate already includes phone and internet costs. If you use the fixed rate method, you can't double-dip by claiming your Telstra bill separately. Choose one method or the other.
- Estimating hours instead of keeping records. The ATO requires contemporaneous records. You can't guess in June that you worked from home "about two days a week". Keep a timesheet, diary, or roster showing actual hours. Even a simple spreadsheet updated weekly counts.
- Claiming a full room's rent or mortgage interest. The fixed rate method doesn't cover occupancy costs like rent, mortgage interest, or council rates. You can only claim those under a different method (the actual cost method) and only if you have a dedicated home office space used exclusively for work.
- Forgetting to claim computer equipment separately. Items like laptops, monitors, keyboards and mice aren't covered by the 70c rate. You can claim these as separate deductions, either depreciated over their effective life or immediately if under $300.
What this calculator doesn't account for
This calculator uses only the fixed rate method at 70 cents per hour. It doesn't calculate deductions under the actual cost method, which might give you a larger deduction if you have high running costs or a dedicated home office.
It doesn't account for:
- Occupancy expenses like rent, mortgage interest, insurance or land tax (which require the actual cost method and a dedicated workspace)
- Computer equipment, software or work tools purchased during the year
- Multiple jobs or income sources where you work from home for different employers
- Changes to the ATO rate mid-year (the 70c rate applies for 2025-26 but may change in future years)
- Cents-per-kilometre car deductions if you occasionally travel for work from your home office
Edge cases and nuances
Split work arrangements: If you work partly from home and partly from a client site or co-working space, only count the hours physically at your home. Time in a WeWork or client office doesn't qualify, even if your employer doesn't provide that space.
Employers providing equipment: If your employer gives you a laptop, monitor or phone allowance specifically for home office equipment, this may be a fringe benefit. You can still claim the fixed rate for running costs, but you can't also claim the equipment your employer already provided or reimbursed.
Rental properties: If you rent out part of your home on Airbnb and also have a home office, you need to apportion carefully. The fixed rate method only covers your work hours. Don't overlap the same space and time with rental income deductions.
Business owners and sole traders: If you run a business from home rather than being an employee, the fixed rate method doesn't apply. You claim actual business expenses under Division 40 (capital allowances) and Section 8-1 (general deductions) instead.
