ATO Home Office Deduction Calculator Australia 2026-27
Working from home? Claim what you are entitled to.
Calculate your home office deduction using the ATO revised fixed rate of 70c per hour. Includes tax saving at your marginal rate, equipment depreciation, and comparison with the actual cost method.
Uses ATO 70c/hr revised fixed rate (from 1 July 2022). Actual hours log required as evidence.
Select the question that matches where you are right now.
Your result shows the total home office deduction using the ATO 70c/hr revised fixed rate. This deduction reduces your taxable income — the tax saving depends on your marginal rate (shown in Standard mode).
Electricity and gas, internet and phone usage, computer consumables (ink cartridges, USB sticks), stationery, and cleaning of the work area. You cannot claim these separately if you use the 70c method.
Depreciation of equipment (laptop, desk, chair, monitors) is not included in the 70c rate. You must claim these separately using the ATO depreciation schedule. Items under $300 are immediately deductible.
A $1,000 deduction reduces your taxable income by $1,000. At the 30% marginal rate, you pay $300 less tax. At the 15% rate, you save $150. The higher your income, the more valuable each deduction becomes.
The deduction is driven by hours worked at home. Every extra hour per week adds about $36 per year to your deduction (70c x 52 weeks).
The ATO requires these to be genuine working hours at home — not breaks, personal tasks, or time you are available but not working. Keep an honest record. The ATO has specific guidance on what counts and what does not.
If you work a 9-hour day with a 1-hour lunch break, only 8 hours count. Similarly, if you check emails for 30 minutes after dinner, those 30 minutes do count. Track what you actually work.
If you only worked from home for part of the year (e.g. after a role change or during a particular project), only claim the actual weeks. The ATO checks that claimed deductions are proportional to your employment situation. 48 weeks is a common figure (52 weeks less 4 weeks leave); adjust to your actual situation.
The most reliable way to maximise your home office deduction is accurate record keeping combined with separate depreciation claims.
Use the ATO myDeductions app or a simple daily log. People who track carefully often find they work more hours at home than they estimated — extra hours at night, early mornings, weekend catchups. All count.
Do not forget to separately claim your computer, second monitor, desk, chair, and headset. A typical home office setup ($2,500 in equipment) might generate $400–$800 in depreciation deductions each year on top of the 70c rate.
If you have a dedicated room and high running costs, use Detailed mode to enter your running costs and office area percentage. The calculator will tell you which method gives a larger deduction.
Once you have your deduction estimate, here are the steps to claim it correctly on your tax return.
Gather your hours log (diary, app export, or timesheet), evidence of relevant expenses (internet bill, phone bill to show you have the service), and receipts for any equipment you are depreciating.
Claim the deduction at D5 (Other work-related expenses) in your tax return. If using a tax agent, provide your total WFH hours and method — they will handle the calculation and any depreciation schedules.
Keep all supporting records for five years after lodgement. If the ATO audits your return, you must produce the hours log and supporting evidence. Without it, the deduction will be disallowed.
The 70c/hr revised fixed rate method — what it covers and how to claim
Revised fixed rate: 70c per hour
From 1 July 2024, the ATO revised fixed rate for working from home is 70 cents per hour (up from 67 cents). This rate covers: electricity and gas used when working, phone and internet (work use), computer consumables (ink, paper), and stationery. The rate applies to every hour you work from home — including overtime.
What it does NOT cover
The 70c rate does not include depreciation of office equipment (computers, desks, chairs, monitors). These must be claimed separately using the ATO depreciation schedule. Items under $300 are generally immediately deductible; items $300+ depreciate over their effective life.
No dedicated room required
Unlike the actual cost method, you do not need a dedicated home office space. You can work at the kitchen table and still claim the 70c rate for those hours.
| Hours/week | Weeks/year | Annual deduction |
|---|---|---|
| 20 hrs/wk | 48 weeks | $672 |
| 30 hrs/wk | 48 weeks | $1,008 |
| 38 hrs/wk | 48 weeks | $1,277 |
| 40 hrs/wk | 48 weeks | $1,344 |
| 40 hrs/wk | 52 weeks | $1,394 |
When the actual cost method might give you a bigger deduction
Actual cost method
The actual cost method requires a dedicated home office space — a room used exclusively (or near-exclusively) for work. You calculate the work-related proportion of all running costs based on the floor area of the office as a percentage of your home total floor area.
What you can claim under actual cost
Electricity and gas (area × usage), cleaning, depreciation of office furniture (desk, chair, shelving), depreciation of home office equipment. Also claimable separately: telephone calls, internet, and decline in value of computers.
Which method is better?
The 70c rate is simpler and requires only a record of hours. The actual cost method can produce a higher deduction if you have a large dedicated office (e.g. 15–20% of total floor area) and high running costs. Use Detailed mode to compare both methods with your actual numbers.
| Situation | Recommended method |
|---|---|
| No dedicated room, mixed use | Fixed rate (70c/hr) |
| Dedicated room, small | Usually fixed rate |
| Large dedicated room (15%+ of home) | Compare — actual may be higher |
| High electricity/gas costs | Compare actual cost method |
How to claim computers, desks, chairs, and monitors under both methods
Depreciation is always separate
Whether you use the fixed rate or actual cost method, depreciation of home office equipment is always claimed separately on your tax return. Under both methods, you can claim the work-related portion of decline in value.
Immediate deduction for items under $300
If an item costs less than $300 and is used primarily for work, you can claim the full cost immediately as a deduction. This applies to items like headsets, webcams, keyboards, and mice.
Effective life examples
| Item | ATO effective life | $1,000 item annual depreciation |
|---|---|---|
| Laptop / computer | 2–3 years | $333–$500/yr |
| Monitor | 5 years | $200/yr |
| Desk | 10 years | $100/yr |
| Office chair | 13 years | $77/yr |
| Phone (smartphone) | 3 years | $333/yr (work % only) |
Partial year rule
If you purchased equipment during the year, you can only claim from the date of purchase to 30 June — not a full year. The ATO depreciation schedule uses either the diminishing value or prime cost method.
What records you must keep and for how long
Actual hours log — mandatory from 1 July 2022
The ATO now requires you to track actual hours worked from home throughout the year. A timesheet, diary, roster, or electronic record is acceptable. You can use the ATO myDeductions app (free) or a simple spreadsheet. The old "representative 4-week diary" approach is no longer sufficient under the revised fixed rate method.
What to record
For each day you work from home: the date, hours worked, and type of work (or just "working from home"). You do not need to record every expense — the 70c rate covers them. For equipment depreciation, keep receipts and note the date and purpose of purchase.
How long to keep records
You must keep tax records for five years from the date you lodge your tax return. This includes hours logs, receipts for equipment, and any evidence supporting your deduction claims.
What if you are audited?
If the ATO audits your return, you must be able to produce evidence of the hours claimed. Without a contemporaneous record, the ATO can disallow the deduction. The ATO myDeductions app creates a record that is easy to export and provide to your tax agent.
❓ Frequently asked Frequently asked questions
What is the ATO home office rate for 2026-27?
The revised fixed rate is 70 cents per hour worked from home (increased from 67 cents on 1 July 2024). This covers electricity, gas, internet, phone, and stationery. It does not cover depreciation of equipment, which must be claimed separately. You must keep a record of actual hours worked — a representative diary is no longer sufficient.
Can I claim phone and internet separately if I use the 70c rate?
No. Under the revised fixed rate method (70c/hr), phone and internet usage is included in the rate. You cannot claim these separately. If you want to claim phone and internet separately, you must use the actual cost method, which requires a dedicated home office space.
Do I need a dedicated home office to claim the 70c rate?
No. The revised fixed rate method does not require a dedicated room. You can work at a kitchen table, bedroom desk, or any space in your home and still claim 70c for every hour worked there. A dedicated room is only required if you use the actual cost method.
What is the difference between the 70c rate and the old 52c rate?
The old 52c rate (used before 1 July 2022) allowed separate claims for phone, internet, and stationery on top of the per-hour rate. The new 70c rate bundles all these together — simpler but you cannot claim them separately. For most people, 70c per hour is more generous than the old 52c + separate claims.
Where these figures come from
Every threshold and tax rate on this page is taken from the Australian Taxation Office (ATO) — the source of record for Australian income tax, Medicare levy, HECS/HELP repayment, and capital gains tax.
- Individual income tax rates (2026–27, Stage 3) — ATO — Individual income tax rates.
- Medicare levy & surcharge — ATO — Medicare levy.
- HECS/HELP repayment thresholds — ATO — Study and training support loans.
- Capital gains tax rules — ATO — Capital gains tax.
- GST rules — ATO — GST.
- Tax offsets & LITO/LMITO — ATO — Tax offsets.
Last checked: July 2026. Rates and thresholds are reviewed against the source of record each November, when annual adjustments for the following tax year are published.