Work-from-Home Deductions: Guidance for the 2025 Financial Year
The ATO has updated guidance for individuals claiming work-from-home (WFH) deductions for the 2024–25 income year.
We set out the key points to assist in determining WFH deductions eligibility and ensuring appropriate record-keeping.
1. Fixed Rate Method – 2025 Update
The fixed rate method for the 2024–25 year is 70 cents per hour worked from home. This covers energy, internet, mobile and home phone usage, and computer consumables.
This rate has increased from 67 cents per hour in the 2023–24 year.
2. Minimum Hours Requirement
There is no minimum number of hours required to claim a deduction. However, to be eligible, the individual must:
Perform substantive employment duties from home
Incur additional running costs as a result of working from home
Maintain records to substantiate the claim
3. Evidence of Hours Worked
To use the fixed rate method, the taxpayer must maintain contemporaneous records of hours worked from home between 1 July 2024 and 30 June 2025.
Records must:
Include start and finish times for each workday
Be recorded at the time of the work or shortly thereafter
Be maintained in the form of a diary, spreadsheet, roster, or timesheet
Estimates or sample records are not accepted.
4. Actual Cost Method – Supporting Evidence
If the actual cost method is used, the taxpayer must:
Calculate work-related use of phone and internet on a reasonable basis
Maintain records for a continuous four-week period demonstrating typical work-from-home patterns
Acceptable documentation includes phone bills, data usage reports, and a diary or spreadsheet showing the proportion of work-related use.
5. Occupancy Expenses – Limited Eligibility
Employees working from home generally cannot claim occupancy expenses such as rent, mortgage interest, or insurance.
These expenses may only be claimed in limited circumstances, such as where a specific area of the home is used exclusively and regularly as a place of business.
Caution: Claiming occupancy expenses may affect eligibility for the main residence exemption from capital gains tax upon sale of the property.
Summary
Work-from-home deductions remain available, but the record-keeping requirements are stricter. Accurate and contemporaneous documentation is essential to support any claim.
If you require assistance in determining the most suitable method or ensuring your records meet compliance requirements, please feel free to contact our office.
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