If you did any work from home during 2025-26, you can almost certainly claim a deduction for it. The question is which of the two methods gives you the bigger refund, and what records you need to back it up. Here is how they compare.
The two methods
Fixed rate method — 70c per hour. You claim 70 cents for each hour you worked from home. That rate bundles together the running costs that are hard to split out: electricity and gas, phone and internet, and stationery and computer consumables. You cannot then claim those same items separately.
Actual cost method. You work out the actual work-related portion of each running cost and claim that. It takes more effort but can be worth more if you have high power or internet bills, or a dedicated home office.
You can use whichever gives the better result, so it is worth checking both with the Work From Home Deduction Calculator.
What records you need
This is where most claims fall over. For the fixed rate method you need:
- A record of the actual hours you worked from home across the whole year — a diary, roster or timesheet. An estimate or a "4 days a week" is no longer enough.
- At least one bill for each running cost the rate covers (to show you incurred the expense).
For the actual cost method you need records of every expense you claim plus a representative record of your work-related use (for example, a four-week diary to work out your internet percentage).
What you can still claim on top
Under both methods you can separately claim the decline in value (depreciation) of equipment like a desk, office chair, monitor or laptop. Items costing $300 or less can usually be claimed in full in the year you buy them; more expensive items are depreciated over their effective life.
What you generally cannot claim: coffee, tea, milk and other general household items, and (for most employees) rent, mortgage interest or rates.
Which method should you use?
- Fixed rate (70c/hr) is simplest and usually wins if your home running costs are modest and you tracked your hours.
- Actual cost can win if you have a dedicated home office, high energy bills, or you work from home most of the week.
Run your real numbers through the WFH calculator — it shows both methods side by side. Then fold the result into your overall return with the Tax Refund Estimator.