Work-from-home & work-related deductions in 2026

A deduction lowers your taxable income, so its real value is the amount you claim multiplied by your marginal rate. Claim $2,000 on a 30% rate and you save around $600 in tax. Three rules apply to everything below: it must relate to earning your income, you must have paid for it yourself (not been reimbursed), and you need a record.

Working from home: the fixed-rate method

The simplest option is the ATO's revised fixed-rate method: 70 cents for every hour you work from home. That single rate covers energy, home and mobile phone, internet, stationery and computer consumables — you can't then claim those bills separately. Work 760 hours from home and that's a $532 deduction.

You need a record of your actual hours across the year — a diary, roster or timesheet — not an estimate. You can still separately claim the work-related decline in value of bigger items like a desk, chair or laptop.

Fixed-rate vs actual-cost

The alternative actual-cost method claims the real work-related portion of each running expense. It can beat the fixed rate if you have high costs (say a dedicated home office and big power bills), but it needs itemised records and apportionment. For most people the 70c rate is simpler and close enough.

Car and travel

If you use your own car for work (not the normal commute), the easy option is the cents-per-km method: 91 cents per business kilometre for 2026-27 (up from 88c), capped at 5,000 business km a year — a maximum claim of $4,550. That single rate covers fuel, servicing, rego, insurance and depreciation. Above 5,000 km, or to claim more, you need the logbook method and actual expenses.

The everyday claims people miss

• Tools and equipment for your job (immediate deduction under $300; decline in value above that).
• Self-education that relates to your current role.
• Union fees, professional memberships and subscriptions.
• Protective clothing and compulsory uniforms (plain clothes and normal shoes don't count).
• Phone and internet work-use portion (if you're not already using the WFH fixed rate for them).
• Income-protection insurance premiums (outside super).

Keep the records

The ATO is explicit: no record, no claim. Keep receipts, a WFH hours log, and a note of how you worked out any work-use percentage. Apps that capture this as you spend save the EOFY scramble — which is exactly the gap PFO is built to close.

Related: how income tax works · income tax calculator. General information only, not tax advice — eligibility depends on your circumstances, so check the ATO or a registered tax agent.