Tax Deductions for Working from Home

The Australian Taxation Office (ATO) has made an important change to the way many people will claim a tax deduction for working from home. 

Two Methods

There are now only two methods you can use to claim a tax deduction for working from home, namely:-

• Actual method; and
• New 67 cents per hour method.

1. Actual Method

This method requires you keep all invoices and/or receipts in relation to running your home.

You calculate your tax deduction as a portion of the total of the expenses. This is often based on the floor area as a % of the total area the costs relate to.

Under this method, you must have a part of your house set aside exclusively for your work. This method has not changed.

2. New Per Hour Method

The new 67cents per hour method applies from 1 March 2023.

This method involves multiplying the number of hours you worked at home by 67 cents. It is used to claim the following expenses:-

• Energy expenses (electricity and gas);
• Internet expenses;
• Mobile and home phone expenses; and
• Stationery and computer consumables.

This amount is different from the previous couple of years where an amount of 80 cents per hour was available if you were required to work from home due to COVID-19.



It is important to note that you cannot claim an additional separate deduction for any of these expenses. For example, if you use your mobile phone when you are both working from home and somewhere other than your home, your total deduction is covered under the 67c per hour method.

You do not need to set aside a part of your house exclusively for work to use this method. In addition, more than one person in the house can use this method.

Key Takeaways

If you want to use the new 67 cents per hour method from 1 March 2023, you are required to keep actual records of the hours you work at home. 

What does this mean?

For the tax year ending 30 June 2023, you need to keep the following source documents:-

• A record which is representative of the total number of hours worked from home during the period from 1 July 2022 to 28 February 2023; and
• A record of the total number of actual hours you worked from home for the period 1 March 2023 to 30 June 2023.

An estimate of the hours in this period will not be accepted by the ATO so you must keep a daily record of the hours worked.

Furthermore, if you wish to use the new $0.67 per hour method, you must keep at least one monthly or quarterly bill or other invoice to show that you actually incurred expenses for energy, internet, phone, stationery and computer consumables.

Although these records are not used to calculate your deduction, you must retain the records to prove you incurred such expenses. The ATO may ask you to produce these records.