If you run your business from a spare room or the kitchen table, you can claim some running costs, and the ATO offers a simpler way to work out the claim.
The fixed rate method
For 2025-26 the ATO fixed rate is 70 cents for each hour you work from home. For a home-based business, that rate covers energy costs (electricity and gas), phone and internet usage, stationery and computer consumables. You multiply your total work from home hours by 70 cents. The ATO's own example is 567 hours at 70 cents, which gives $396.90.
Items outside the rate can be claimed separately. The ATO says a business can separately claim the decline in value of depreciating assets such as laptops, mobile phones and office furniture.
The records that matter
This is where claims go wrong. The ATO says you need a record of the actual hours you worked from home across the whole income year, such as a timesheet, roster, diary or similar document. An estimate is not acceptable. You also need at least one record of each expense the rate covers, for example one electricity bill and one internet bill.
What to do
- Start a log today. A shared calendar, a spreadsheet or a diary all work. Record the actual hours, not a guess at the end of the year.
- Keep one bill for each covered expense. Store them with your tax records.
- Track equipment separately. Keep receipts for laptops, phones and furniture so you can claim their decline in value.
- Do not double dip. If you use the fixed rate, do not also claim the costs it already covers.
- Ask about your situation. If you have a dedicated work area, other methods may suit you better, so check with your accountant before you lodge.
If you lodge your own return, the due date is close, so gather your hours records now.