Working From Home Tax Calculator

Quick answer

For the 2024–25 and 2025–26 income years, the simplest ATO claim is usually the fixed-rate method at 70 cents per hour (PCG 2023/1). Multiply your actual hours worked from home by $0.70. That number is a deduction — it lowers taxable income. The cash you keep is closer to that deduction × your marginal tax rate (often 32% once you include the 2% Medicare levy in the 30% bracket). Keep a full-year hours log; a guessed average is not enough. From 2026–27, also weigh the ATO’s $1,000 standard work-related deduction against an itemised WFH claim (see below) — and confirm the fixed rate for that year on the ATO site before lodging.

Fixed rate vs actual cost

Sources (checked 4 Sep 2026): ATO fixed rate method (lists 70c for 2024–25 and 2025–26); PCG 2023/1.

What the 70c rate includes (and excludes)

The fixed rate bundles additional running costs into one figure:

• Included: electricity and/or gas, internet, mobile and/or home phone, stationery and computer consumables.
• Not included (claim separately if eligible): decline in value of depreciating assets you use for work (laptop, monitor, desk, office chair).
• Usually not claimable for employees as occupancy: rent, mortgage interest, rates, land tax — do not bolt these onto a fixed-rate claim.

If you use the fixed-rate method, do not also claim phone or internet bills for the same year under another work-related expense item for those covered categories. That is the classic double dip the ATO watches for.

$1,000 standard deduction (from 2026–27) and WFH claims

From the 2026–27 income year, the ATO applies a standard deduction of up to $1,000 for work-related expenses for eligible taxpayers (also called the $1,000 instant tax deduction). It does not apply to Tax Time 2025–26. It is a deduction that reduces assessable income — not a tax offset or rebate — and it can be applied automatically if you are eligible.

• How it interacts with a WFH claim: the standard amount is reduced by most work-related expenses you claim in your return — including an itemised working-from-home fixed-rate or actual-cost claim. You do not get $1,000 plus your full WFH deduction stacked on top.
• Practical rule of thumb: if your total itemised work-related claims (WFH + other eligible work expenses) would stay under about $1,000, letting the standard deduction apply is usually simpler. If your genuine itemised claims exceed $1,000, claim the itemised path instead — and keep full records for the whole claim, not only the slice above $1,000.
• Exceptions the ATO flags: union fees and memberships of a trade, business or professional association do not reduce the standard deduction (claim those separately with records if needed).
• What this page does not do: this calculator still estimates the fixed-rate / actual-cost WFH figure. It does not auto-apply or net the $1,000 standard deduction against your claim — you (or your tax agent) still need to choose the better overall work-related outcome for 2026–27.

Sources: ATO — Standard deduction for work-related expenses; Budget 2026–27 tax reform overview (budget.gov.au). Checked 4 September 2026.

Worked example 1 — hybrid, 20 hrs/week × 48 weeks

You work from home about three days a fortnight pattern averaging 20 hours a week for 48 weeks, on $85,000 taxable income before the claim. Fixed-rate maths below uses the current published 70c rate (2024–25 / 2025–26). Tax-saved uses 2026–27 resident brackets for illustration only.

• Hours: 20 × 48 = 960
• Fixed-rate deduction: 960 × $0.70 = $672
• Taxable income falls to $84,328
• Estimated tax + Medicare saved ≈ $215 (about 32% of $672)

That $215 is the useful number for planning — not the $672 deduction line.

Worked example 2 — add a laptop decline in value

Same 960 hours ($672 fixed rate). You also work out decline in value on a work laptop at a fair work-use percentage and get $400 for the year.

• Total deduction: $672 + $400 = $1,072
• Estimated tax + Medicare saved ≈ $343

Enter your own decline-in-value figure above — this calculator does not build an asset register for you.

Worked example 3 — when actual cost might win

Suppose your carefully apportioned energy, phone, internet and stationery work portion totals $1,200, and your fixed-rate claim on the same hours is only $672. On running costs alone, actual cost is higher — but only if your records support every dollar. Many hybrid workers find 70c easier and safer than defending floor-area and usage percentages.

Record rules that trip people up

1. Full-year hours. Under the revised fixed-rate method, a representative four-week diary alone is not enough to prove total hours. Keep a contemporaneous log for the whole income year.
2. One bill per covered category. Keep at least one electricity/gas, internet, phone or stationery record showing you incurred those costs.
3. Five years. Keep supporting records for about five years from the date you lodge.
4. Actual work from home. Hours must be hours you carried out employment or business duties at home — not merely being rostered remotely with no additional running costs.

How this calculator works

1. Total hours = (hours/week × weeks) or your entered annual total.
2. Fixed-rate running claim = hours × $0.70 (ATO published rate for 2024–25 and 2025–26; not confirmed here for 2026–27).
3. Total deduction = fixed-rate claim + optional equipment decline in value (does not net the 2026–27 $1,000 standard deduction).
4. Tax saved = tax bill on income before the claim − tax bill after subtracting the deduction, using 2026–27 resident brackets, Medicare levy shade-in and LITO for illustration (same approach as our income tax calculator).
5. If you enter an actual-cost total, we compare it to the fixed-rate running claim only (depreciation stays separate).

Frequently asked questions

Primary sources

• Fixed rate method — ATO (70c listed for 2024–25 and 2025–26)
• Working from home expenses — ATO
• PCG 2023/1 — ATO Legal database
• Standard deduction for work-related expenses — ATO (from 2026–27)
• Tax reform — Budget 2026–27 ($1,000 instant tax deduction overview)
• TR 93/30 Income tax: deductions for home office expenses — ATO

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