Work From Home Tax Calculator (Australia)

How the work-from-home deduction works

If you work from home as an employee, you can claim the extra running costs it creates. The simplest way is the ATO fixed-rate method: you claim a flat 70 cents for every hour you work from home during the 2025-26 income year. The maths is one line. Multiply your total hours by 70c and that is your deduction. Work 20 hours a week from home for 48 weeks, and 960 hours at 70c gives a $672 deduction.

A deduction is not cash back. It lowers your taxable income, and the tax you save is that deduction multiplied by your marginal rate. On a $85,000 income the marginal rate is 30%, so a $672 deduction saves about $201.60 in tax. Add the 2% Medicare levy and it is closer to $215. The calculator above shows both the deduction and the estimated saving for your own hours and income.

What the 70c rate covers

The fixed rate rolls the running costs that are awkward to split between work and home into a single hourly figure. It covers:

Because these are baked into the rate, you cannot claim them again anywhere else in your return. You can still separately claim the work-related decline in value of assets the rate does not cover, such as a desk, office chair, computer, monitor or printer. The depreciation calculator works out that part.

Fixed rate vs actual cost method

There are two methods, and you pick the one that suits you each year. The fixed-rate method (70c an hour) is quick and needs light records. The actual cost method works out the real work-related share of each bill: energy, phone, internet, depreciation and more. It can give a bigger deduction if you have high costs or a dedicated home office, but you need receipts and a fair way to apportion every expense. Most people use the fixed rate for the lower record-keeping burden.

Records you need to keep

To use the fixed rate you must keep a record of the total hours you worked from home across the whole income year, written down as you go. A timesheet, roster, diary or logbook all work. From the 2024-25 year, an estimate or a short sample period is not accepted; the ATO wants your real hours for the full year. Keep one bill for each type of running cost the rate covers, for example a single electricity bill, to show you incurred that expense. No records, no claim, so start logging your hours now if you have not.

How to use this calculator

1. Enter your hours from home, either per week and weeks worked, or a single total for the year.
2. Enter your annual taxable income so the tool can find your marginal tax rate.
3. Read your deduction (hours times 70c) and the estimated tax it saves.
4. Tick the 2% Medicare levy box to see the slightly larger saving it adds.

Frequently asked questions