WFH Rate 2026: 70c an Hour for 2025–26 (With a Worked Example)
Author
Emmanuel Sarris
Date Published
The WFH rate for 2026 is 70 cents per hour worked from home. That's the ATO fixed rate for 2025–26, the return you lodge in 2026, and no different rate has been announced for 2026–27. In August 2025, 36% of employed Australians usually worked from home (Australian Bureau of Statistics, Working Arrangements, 2025), and most of them can claim a deduction at tax time. But the ATO is watching this claim more closely than almost any other, and if your records are wrong your deduction can be denied on review. This guide shows what you can claim in 2026, with a worked example, and the one mistake that sinks most returns.
Key takeaways: the ATO fixed rate is 70 cents per hour for 2024–25 and 2025–26, and no different rate has been announced for 2026–27 (ATO, Fixed rate method). To use it, you need a record of the actual hours you worked from home for the whole year; estimates aren't accepted. The rate covers energy, phone, internet and stationery, while equipment, furniture and their repairs are claimed separately. From 2026–27, what you claim for working from home reduces the new $1,000 standard deduction dollar for dollar (ATO, Standard deduction).
WFH rate 2026 at a glance
2025–26 returns (lodging now): 70 cents per hour worked from home, the same as 2024–25. Self-lodgers have until 31 October 2026.
2026–27 (from 1 July 2026): the ATO hasn't announced a different rate. Its guideline sets 70c from 1 July 2024 with no end date, but check before you lodge in 2027.
New for 2026–27: a standard deduction of up to $1,000 for work-related expenses, applied automatically. Working from home costs you claim reduce it dollar for dollar.
Records: for the fixed rate, a record of every hour worked from home for the whole year, plus one bill for each type of expense the rate covers.
In practice, if your working from home claim and other work expenses for 2026–27 add up to $1,000 or less, the standard deduction gives you the same result with no records. If they add up to more, claim them all and keep written evidence for every one (ATO, Standard deduction).
This guide covers who can claim, how the two methods work, the records the ATO accepts and what changes from 2026–27. For other work-related claims, see our guide to what expenses you can claim on tax.
You're working from home to fulfil your employment duties, not just doing minimal tasks such as occasionally checking emails or taking phone calls.
You incur additional running expenses because you work from home.
You have records showing you incurred those expenses.
You don't need a separate room or a dedicated work area to use the fixed rate method; a desk in the corner of the living room counts (ATO, Fixed rate method). You can't claim anything your employer pays for or reimburses, including a laptop or phone it supplies. If your employer pays or reimburses all of your additional running expenses, you can't use the fixed rate; if it covers only some of them, you still can (ATO, PCG 2023/1). Coffee, tea, milk and other general household items aren't deductible, even if your employer provides them at the office.
What Is the Work-From-Home Fixed Rate in 2026?
In 2026, the ATO fixed rate is 70 cents per hour worked from home for the 2025–26 income year, the same as 2024–25 (ATO, Fixed rate method). That's up from 67 cents for 2022–23 and 2023–24. It bundles everyday running costs into a single per-hour figure, so you don't have to apportion each bill yourself.
The 70-cent rate covers electricity and gas, home and mobile phone use, internet and data, plus stationery and computer consumables. Here's the catch: because those costs are baked in, you can't also claim your phone or internet bill on the side. Try it, and you've double-dipped.
What the rate doesn't cover, you claim separately: the decline in value of equipment and furniture such as a desk, chair, computer or monitor, and the cost of repairing them. Items costing $300 or less that you use mainly for work can be claimed in full in the year you buy them; dearer items are depreciated (ATO, Fixed rate method).
Example: a 2025–26 fixed rate claim
Sarah works from home three days a week, 8 hours a day, for 48 weeks of the year, and logs her hours in a timesheet as she goes: 8 × 3 × 48 = 1,152 hours. Her 2025–26 fixed rate claim is 1,152 × $0.70 = $806.40, which covers her electricity, internet, phone and stationery. She also bought a $450 ergonomic chair that she uses only for work. Because it cost more than $300, she claims its decline in value over its effective life on top of the $806.40, rather than the full $450 this year.
ATO fixed rate by income year
2026–27: no different rate announced as at October 2026
2024–25 and 2025–26: 70c per hour
2022–23 and 2023–24: 67c per hour
2020–21 and 2021–22: 52c per hour (an earlier version of the method)
Source: Australian Taxation Office, Fixed rate method (updated 8 June 2026) and PCG 2023/1.
How Do You Keep Records the ATO Will Actually Accept?
To use the fixed rate method, you must keep a record of the actual hours you worked from home across the entire income year. Estimates aren't accepted, including working out your hours from a sample period (ATO, Fixed rate method). This has applied since 1 March 2023, and if you can't produce the record, you can't use the fixed rate.
The record can take any form, as long as you keep it as the hours happen. A timesheet, a roster, a calendar, or a running diary all work. What doesn't work is sitting down in July and guessing your hours for the year just gone.
You also need at least one bill for each type of expense the rate covers. If you used electricity and your phone while working from home, keep one electricity bill and one phone bill on file. These prove you actually incurred the costs the 70-cent rate represents.
Our advice from the desk: the clients who breeze through ATO review are the ones who logged hours in real time — a simple spreadsheet or calendar entry per workday. The ones who get stuck are reconstructing a year from memory in July. Start your log on 1 July and the work-from-home claim looks after itself.
A quick gut-check: could you show the ATO a record kept at the time for every hour you're claiming? If not, you can't use the fixed rate for the hours you didn't record. The actual cost method accepts a representative 4-week diary, but needs bills and a fair work-use calculation. For help with your whole return, see our individual tax returns service.
Fixed Rate or Actual Cost: Which Method Gives the Bigger Refund?
The actual cost method usually produces a larger deduction when you have significant home running costs, because you claim the genuine work-related portion of each expense rather than a flat rate (ATO, Actual cost method, 2026). The trade-off is paperwork. You need receipts and a way to apportion each cost.
Under the actual cost method, you can claim the work-related share of electricity and gas, phone and internet, stationery, cleaning a dedicated home office, and the decline in value of assets like a desk, chair, laptop or monitor. Items costing $300 or less that you use mainly for work can be claimed in full in the year you buy them; anything above $300 is depreciated over time.
Electricity and gas: for each item you use while working, such as a heater, air conditioner, lights or computer, multiply its power rating in kilowatts (from the manufacturer or the energy rating label) by your price per kWh from your bill, and by the hours you used it for work. You can't claim for time other people in your household use the room for their own purposes.
Phone and internet: keep a record of your work use over a continuous 4-week period that represents your usual pattern, for example work calls as a share of all calls on an itemised bill, or your work data as a share of your household's total. Apply that percentage to the year's bills. If your use changes through the year, you need records for the whole year (ATO, Home phone and internet expenses).
Records are different too. For hours, either keep a record for the whole year or a diary for a continuous 4-week period that represents your usual pattern. You also need receipts and bills for each cost, and a record of how you worked out the work-related share (ATO, Actual cost method).
The ATO confirms the actual cost method lets you claim the work-related portion of all running expenses plus the decline in value of office assets, which can beat the 70-cent rate for taxpayers with high energy or equipment costs (ATO, Actual cost method, 2026). Bought a $1,500 ergonomic setup this year? Actual cost is probably worth the extra effort.
So which wins? If you work limited hours and have modest bills, the fixed rate is faster and often comparable. If you work full-time from home, run a power-hungry setup, or bought equipment this year, run the actual cost numbers before you decide. We can model both for you: book an appointment.
Can you claim rent or mortgage interest?
Employees generally can't claim occupancy expenses such as rent, mortgage interest, council rates or home insurance. The exception is where part of your home has the character of a place of business, your employer doesn't provide a workplace, and the area is used exclusively or almost exclusively for work. If you can claim occupancy expenses and you acquired your home after 20 September 1985, there are capital gains tax implications for your home; claiming running expenses only has none (ATO, Occupancy expenses).
Sole traders and partnerships running a business from home can use the same 70c an hour fixed rate for the hours they work in the business at home, claiming equipment separately, or the actual cost method. They may also be able to claim occupancy expenses such as rent, mortgage interest, council rates and house insurance, but only for an area of the home set aside as a place of business, and capital gains tax can then apply when the home is sold (ATO, Home-based business expenses).
Why Is the ATO Watching This Deduction So Closely?
Work-related expenses are the ATO's largest individual deduction category, and that scale invites scrutiny. In 2023–24, 10.7 million Australians claimed $31.6 billion in work-related expenses — about 53% of all individual deductions, averaging $2,956 per person (ATO, 2023–24 Taxation Statistics, 2025). Working-from-home costs sit inside that pool.
Because the claim is so common and often poorly substantiated, the ATO compares deductions with others in similar occupations and income ranges, and claims that look high for your job can be flagged for review.
The lesson isn't to claim less than you're entitled to. It's to claim exactly what you can prove. Good records turn a flagged claim into a non-event.
What changes for working from home claims from 1 July 2026?
From 1 July 2026, the tax rate on income between $18,201 and $45,000 drops from 16% to 15%, with a further cut to 14% from 1 July 2027 (ATO, Personal income tax cuts, 2026). That change applies to the 2026–27 year, not the 2025–26 return you're lodging now.
From the 2026–27 income year, eligible employees get a standard deduction of up to $1,000 for work-related expenses, without needing to have spent the money or keep records. It's law under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, and the ATO applies it automatically (ATO, Standard deduction for work-related expenses). It isn't available for 2025–26 returns.
Working from home costs count. Whichever method you use, what you claim reduces the standard deduction dollar for dollar.
Not simply one or the other. Claim $400 of working from home costs and you still get $600 of standard deduction: $1,000 in total, the same as claiming nothing.
Records for everything above $1,000. From 1 July 2026 the $300 no-receipts and $150 laundry exceptions no longer apply to anyone. Claim more than the standard deduction and you need written evidence for all the work-related expenses you claim.
Equipment too. Decline in value claims for a work laptop or desk also reduce the standard deduction.
For example, 1,000 hours at 70c is a $700 claim. Claim it and your standard deduction drops to $300, so your total is still $1,000. Add $500 of other work expenses and your claims total $1,200: you get $1,200 and no standard deduction, but you need records for all of it.
Our advice: keep logging your hours from 1 July 2026 anyway. You won't know until June 2027 whether your work expenses will pass $1,000, and you can't rebuild a fixed-rate hours record after the fact.
How to Claim Your WFH Deduction in 2026: A Quick Checklist
Claiming correctly comes down to a few steps the ATO can verify, and most disputes trace back to a missing record rather than a wrong number.
Choose your method. Fixed rate (70c an hour for 2025–26, simple) or actual cost (bills and receipts, sometimes larger). Run both if you're unsure.
Prove your hours. For the fixed rate, keep a real-time log for the whole year (timesheet, roster or diary). No estimates.
Keep one record per expense. Hold at least one bill or receipt for each cost the rate covers (for example, electricity and phone).
Don't double up, but don't miss out. On the fixed rate, never claim phone or internet separately, but do claim the decline in value of your desk, chair or computer.
From 2026–27, compare with $1,000. If your total work expenses won't pass the $1,000 standard deduction, itemising gives you no extra deduction.
Get a second look. A registered tax agent can confirm your method and catch errors before the ATO does.
Not sure which method maximises your refund, or whether your records will pass? Australia Wide Tax Solutions is a registered tax agent (TPB 78641007). Book an appointment at our Sydney office, or work with us online from anywhere in Australia.
Frequently asked questions
Not for the fixed rate method. You need a record of the actual hours you worked from home across the whole income year, kept as you work them (ATO, Fixed rate method). The actual cost method accepts a diary covering a continuous 4-week period that shows your usual pattern, but you also need bills and a fair way to work out the work-related share (ATO, Actual cost method).
Electricity and gas, home and mobile phone use, internet and data, and stationery and computer consumables (ATO, Fixed rate method). You can't claim any of these separately on top of the fixed rate.
Yes, under either method. On the fixed rate, the decline in value of furniture and equipment such as a desk, chair or computer, and the cost of repairing them, is claimed on top of the hourly rate (ATO, Fixed rate method). Items costing $300 or less that you use mainly for work can be claimed in full in the year you buy them; dearer items are depreciated. You can only claim the work-related share.
The ATO hasn't announced a different rate. Its guideline PCG 2023/1 sets 70 cents per hour from 1 July 2024, but the ATO's working from home pages only list rates up to 2025–26 (ATO, PCG 2023/1). Check the rate before you lodge your 2026–27 return, and keep a record of your actual hours from 1 July 2026.
From 2026–27, eligible employees automatically get a standard deduction of up to $1,000. Working from home expenses you claim reduce it dollar for dollar, so claiming them only helps if your total work-related expenses are more than $1,000. If you claim more, you need written evidence for all of them, because the $300 no-receipts exception no longer applies (ATO, Standard deduction). It doesn't apply to 2025–26 returns.
Generally not as an employee. Occupancy expenses are only claimable if part of your home has the character of a place of business, your employer doesn't provide a workplace, and the area is used exclusively or almost exclusively for work. If you can claim them and you bought your home after 20 September 1985, there are capital gains tax implications (ATO, Occupancy expenses).
Not for the 2025–26 return. The cut from 16% to 15% applies from 1 July 2026, so it affects the 2026–27 income year (ATO, Personal income tax cuts).
You'll be asked for your records. If you used the fixed rate but can't show a record of your actual hours, you can't use the fixed rate and can only claim actual costs you can prove (ATO, PCG 2023/1).
The Bottom Line
Working-from-home deductions are worth claiming, but 2026 rewards records over guesswork. Keep these three things straight:
The fixed rate is 70 cents per hour for 2024–25 and 2025–26. It covers phone, internet, energy and stationery; claim equipment and furniture separately.
On the fixed rate, log every hour worked from home as you go. No estimates.
From 2026–27, what you claim reduces the $1,000 standard deduction dollar for dollar, so itemising only adds value once your work expenses pass $1,000.
Tax time doesn't have to be stressful. If you'd like a registered agent to confirm your method, check your records, and lodge with confidence, the team at Australia Wide Tax Solutions can help in person in Sydney or online. For your next read, see our investment property tax guide if you also earn rental income.
Sources
Australian Taxation Office, Fixed rate method (working from home expenses), retrieved 2026-06-22, https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/working-from-home-expenses/fixed-rate-method
Australian Taxation Office, Actual cost method (working from home expenses), retrieved 2026-06-22, https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/working-from-home-expenses/actual-cost-method
Australian Taxation Office, 2023–24 Taxation Statistics released, retrieved 2026-06-22, https://www.ato.gov.au/media-centre/2023-24-taxation-statistics-released
Australian Taxation Office, Personal income tax – new tax cuts for every Australian taxpayer, retrieved 2026-06-22, https://www.ato.gov.au/about-ato/new-legislation/in-detail/individuals/personal-income-tax-new-tax-cuts-for-every-australian-taxpayer
Australian Bureau of Statistics, Working Arrangements, August 2025, retrieved 2026-06-22, https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/working-arrangements/latest-release
Roy Morgan, More than 6.7 million Australians 'work from home', June 2025, retrieved 2026-06-22, https://www.roymorgan.com/findings/9981-work-from-home-june-2025
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