Can I Claim Home Office as a Business Expense in Australia?
Yes, Australian businesses and employees can claim home office running costs. The ATO offers a fixed-rate method of 70 cents per work-from-home hour (FY24–25) covering electricity, gas, internet, phone and stationery, or you can claim actual costs.
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What Australian Taxation Office (ATO) says
From 1 July 2024 the ATO's revised fixed-rate method is 70 cents per hour worked from home, covering energy, internet, mobile and home phone, stationery and computer consumables. You must keep a record of all hours worked from home (not just an estimate). Alternatively, claim actual costs apportioned by floor area and time. The fixed rate is 70 cents per hour for 2024-25 and 2025-26. Check the ATO page for the 2026-27 figure before lodging. The rate bundles internet and data, phone usage, electricity and gas for heating, cooling and lighting, and stationery and computer consumables, and none of those can be claimed again separately. The ATO also requires at least one document for each covered expense type, such as one electricity bill and one internet bill. An estimate of hours is not acceptable. Timesheets, rosters, logs of time on employer systems or a diary for the full year all qualify. Assets such as computers and office furniture are claimed separately.
When you can claim
- 70 cents/hour fixed rate for working from home (FY25)
- Actual costs of electricity, internet, phone apportioned by use
- Depreciation of office furniture and equipment ($300 immediate write-off, otherwise effective life)
- Cleaning costs of dedicated work area
- Decline in value of a computer, desk or chair used at home, claimed separately from the 70 cent rate
When you cannot claim
- Mortgage interest or rent if you have a regular workplace elsewhere
- Coffee, tea, milk for personal consumption
- General household repairs
- Council rates and home insurance (employees)
- Items already covered by the fixed rate, claimed a second time as an actual cost
Good to know
Pro tip: Keep a contemporaneous diary or timesheet of hours worked from home. The ATO no longer accepts 'representative' 4-week samples: you need the full year's actual hours.
Important: The fixed rate method is aimed at individuals working from home, so a company that wants to reimburse a director for home costs should agree the arrangement in writing and keep the same hours record. The actual cost method needs a floor-area and time calculation, and it covers occupancy costs only for people who run a business from home with a place of business.
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