Yes — if you work from home for employment or business purposes, you can claim a deduction for the additional costs you incur. You do not need a dedicated room. The ATO allows home office deductions as long as you are genuinely performing work tasks at home and have incurred extra costs as a result.
What Counts as a “Home Office” for Tax Purposes?
The ATO does not require a separate, dedicated room. A home office is simply the area of your home you use to perform work. It could be:
- A spare bedroom used as a study
- A desk in the corner of your living room
- A dining table where you work regularly
However, the type of space affects what you can claim:
- Dedicated home office — exclusive work use — allows claims for occupancy costs (self-employed only) and full room running costs
- Multi-use area — shared living/work space — running cost claims are apportioned more conservatively
What You Can Claim
For employees working from home, deductible expenses include:
| Expense | Method |
|---|---|
| Electricity and gas (work hours) | Fixed rate (67c/hr) or actual |
| Internet (work proportion) | Fixed rate (67c/hr) or actual |
| Phone (work proportion) | Fixed rate (67c/hr) or actual |
| Stationery and consumables | Fixed rate (67c/hr) or actual |
| Decline in value of equipment (computer, desk, chair) | Claimed separately under either method |
| Repairs to home office equipment | Actual cost |
For self-employed sole traders with a dedicated home office used exclusively for business:
- All of the above, plus
- A proportion of occupancy costs — rent or mortgage interest, rates, insurance — based on the floor area ratio of the office to the total home
- Warning: Claiming occupancy costs as a sole trader can trigger a partial loss of the main residence CGT exemption when you sell the property
What You Cannot Claim
- Mortgage repayments (employees) — even if you have a home loan and work from home
- Rent (employees) — not deductible as a home office occupancy cost for employees
- General household expenses — groceries, general cleaning, internet if already covered by fixed rate
- New home office fit-out as an immediate deduction — furniture and equipment are depreciated over their effective life
The Two Calculation Methods
See the full guide on work-from-home tax deductions for a detailed breakdown of:
- Fixed rate method — 67c/hour, simplified record-keeping
- Actual cost method — higher deduction potential, more complex records
Record-Keeping
Whichever method you use, you must keep a diary of actual hours worked from home throughout the year. From FY2022–23, the ATO no longer accepts a representative four-week diary for the fixed rate method — you need a record of all hours for the full year.
Frequently Asked Questions
Can I claim if I only work from home one or two days per week? Yes. You claim based on the actual hours worked from home. Even part-time WFH generates a legitimate claim.
My employer pays for my internet at home — can I still claim? If your employer reimburses the cost, you cannot claim the same expense. If your employer contributes a flat amount but your actual work-related internet cost is higher, you may be able to claim the difference with appropriate records.
Does claiming home office expenses affect my property CGT exemption? For employees using the fixed rate or actual cost method for running expenses only: generally no impact on your main residence CGT exemption. For self-employed people claiming occupancy costs (rent, mortgage): there may be a partial CGT exemption reduction. This is an important distinction and specialist advice is recommended before making occupancy-cost claims.
This article provides general tax information. For advice tailored to your situation, speak with a registered tax agent. Find one through the Tax Practitioners Board register.