Home Office Deduction Calculator Australia

Millions of Australians now work from home at least part of the week, yet many freelancers and remote workers leave money on the table because they aren't sure how much they can claim. This free home office deduction calculator for Australia does the maths: enter your hours and, optionally, your actual running costs, and see which ATO method gives the bigger deduction.

Disclaimer: This calculator provides general estimates only and does not constitute tax advice. The rates and rules reflect ATO guidance current at the time of writing. Always consult a registered tax agent for advice specific to your circumstances.

This calculator uses the ATO fixed rate for the 2025-26 income year (1 July 2025 to 30 June 2026): 70 cents per hour.

How to Use This Calculator

Start by entering the number of hours you work from home each week and the number of weeks you work per year. The default is 48 weeks, which accounts for annual leave and public holidays. As soon as you enter your weekly hours, the calculator shows your deduction under the ATO's fixed rate method (70 cents per hour for 2024-25 and 2025-26).

To compare that result against the actual cost method, fill in your annual electricity, internet, and phone expenses, then set the percentage of each that relates to work. For example, if you use the internet roughly half for work and half for personal browsing, enter 50. The calculator will show both results side by side and tell you which method gives you a bigger claim. Treat the actual cost figure as a rough guide: the ATO works out energy costs from each appliance's running cost and your work hours, as explained below.

Keep in mind this tool covers running expenses only. The decline in value of equipment such as desks, monitors and computers is claimed separately under both methods. For a deeper explanation of what each method includes, read our full guide to home office deductions in Australia.

Fixed Rate Method Explained

For the 2024-25 and 2025-26 financial years, the ATO fixed rate is 70 cents per hour worked from home. (It was 67 cents for 2022-23 and 2023-24.) This single rate is designed to cover a bundle of everyday running expenses:

• Electricity and gas for heating, cooling, and lighting your workspace
• Home and mobile internet or data
• Phone usage (home and mobile)
• Stationery and computer consumables such as printer ink and paper

The fixed rate does not cover equipment depreciation. Items like desks, office chairs, monitors, and laptops are claimed separately based on their effective life, so you can claim their decline in value on top of the fixed rate.

To use this method you need a record of the actual hours you work from home across the whole year, kept as you go: a timesheet, roster, diary or time-tracking app. An estimate isn't accepted. You also need to keep one bill or document for each type of expense the rate covers, for example an electricity bill and a phone bill.

For full details, see the ATO's working from home expenses page.

Actual Cost Method Explained

The actual cost method replaces the flat hourly rate with a calculation based on the real work-related proportion of each household expense. It requires more effort, but for people with a dedicated home office and high utility costs, it can produce a significantly larger deduction.

Here is how it works in practice:

1. Record your hours. Keep a record of the hours you work from home for the whole year, or a diary for a continuous 4-week period that shows your usual pattern.
2. Work out energy costs. For heating, cooling and lighting, multiply the cost per unit of power on your bill by each appliance's usage per hour and by your work hours.
3. Work out phone and internet use. If your bills are itemised, work out your work-related use over a continuous 4-week period and apply that percentage to the whole year.
4. Add them up. Include the work share of stationery and computer consumables. If you have a dedicated home office, cleaning costs can be apportioned by the room's share of your home's floor area.

You will need to keep your bills and receipts, receipts for equipment and furniture, your record of hours or 4-week diary, and records that show the work-related share of each expense. The ATO requires records for five years from the date you lodge the relevant return. Digital copies (photos and scans) are accepted.

Which Method Should You Choose?

The right method depends on your situation:

Choose the fixed rate method if:

• You work from home part-time or a few days a week
• You share your workspace with the rest of the household (kitchen table, living room)
• Your utility bills are modest
• You prefer minimal record-keeping and a straightforward claim

Choose the actual cost method if:

• You have a dedicated room used primarily or exclusively as your office
• Your electricity, internet, or phone costs are above average
• You work from home full-time, five or more days a week
• You are happy to keep detailed records of every expense

For most part-time work-from-home arrangements, the fixed rate is the better choice. It is simple: you need a record of your hours and one bill for each type of expense the rate covers. Full-time freelancers and sole traders with a dedicated home office, on the other hand, often find that the actual cost method is worth the extra paperwork. The calculator above lets you test both scenarios with your own numbers so you can see the difference before committing to either approach.

For more ways to reduce your tax bill, check out our 5 tax deduction tips every freelancer should know.

Track Home Office Expenses with Taxr

Whichever method you choose, you need tidy records. Snap a photo of the receipt for your new monitor, office chair or stationery order, and Taxr reads it and suggests a category (such as equipment or office supplies) for you to confirm. At tax time, export an Excel or PDF summary with dates, amounts and GST to hand to your accountant or use for your own return.

No more shoeboxes of crumpled receipts. No more scrambling in June to find that printer ink invoice from October.

Download Taxr free and start tracking your home office deductions today.

Disclaimer: This article provides general information only and does not constitute tax advice. Consult a registered tax agent for advice specific to your circumstances.