Working from home 2 days a week: what the 70c deduction is worth in 2025–26

If you work from home a couple of days a week, the fixed rate method lets you claim 70c for every hour you work there in 2025–26. It sounds small, and it is often misunderstood. A deduction is not the amount you get back. It lowers your taxable income, and the refund is that amount times your marginal rate. This guide shows what the claim is worth in dollars for 1, 2, 3 and 5 days a week.

Update, 28 October 2026. This guide is for the 2025–26 return. From 2026–27 an automatic standard deduction of up to $1,000 for work-related expenses applies to eligible employees, with no records needed. Working from home expenses are among those that reduce it dollar for dollar. Claiming $245, $489 or $734 for one to three days a week would therefore add nothing on its own, and a claim of $1,224 for five days would add $224 over the $1,000. The equipment section below also needs checking against the new rules. The ATO has published a draft ruling, LCR 2026/D5, on how it applies.

How the fixed rate method works

The ATO rate is 70c per work hour for both 2024–25 and 2025–26. It was 67c for the two years before that. You multiply the hours you actually worked from home by the rate, and that is your deduction.

The 70c covers these running costs, so none of them can be claimed separately:

• internet and data
• mobile and home phone use
• electricity and gas for heating, cooling and lighting
• stationery and computer consumables, such as printer ink

To use the method, you need to incur extra running costs because you work from home. You also need a record of the hours.

What the deduction comes to

Here is the deduction for a standard 7.6-hour day across 46 working weeks. That allows for annual leave and public holidays.

What it's worth at tax time

The tax saving depends on your income. Each dollar of deduction saves your marginal tax rate plus the 2% Medicare levy. Between $37,500 and $66,667 it saves a little more, because the low income tax offset shrinks as income rises in that range. A lower taxable income means a larger offset.

So someone on $90,000 who works from home two days a week claims $489 and pays $157 less tax. Someone on $60,000 claiming the same hours saves $164, slightly more, because of the offset.

Equipment is claimed on top

The 70c rate doesn't cover furniture or technology. The work-related part of items such as a desk, chair, monitor or laptop is claimed separately:

• An item costing $300 or less can be claimed in full in the year you buy it.
• An item over $300 is claimed over its effective life, as it declines in value.
• If you also use the item privately, only the work share counts.

For example, a $250 chair used only for work, plus two days a week at home, takes the person on $90,000 to a total claim of $739. Their tax falls by $237.

The record the ATO asks for

This is where many claims fall down. The ATO wants a record of the actual hours you worked from home for the whole year. A timesheet, roster or diary works. It must be made at the time you do the work. An estimate made later, or a typical week multiplied out, is not accepted.

You also need at least one record for each type of running cost the rate covers. A phone bill and an electricity bill are examples. Records are generally kept for five years from when you lodge.

The other option: actual cost

Instead of 70c an hour, you can claim the actual extra costs of working from home. This means working out the work share of each bill, and it needs more detailed records. It can give a larger claim if your costs are high, such as running heating all day in winter. It takes more work to calculate and to support.

Timing

If you lodge your own 2025–26 return, it is generally due by 31 October 2026. Returns lodged through a registered tax agent usually have a later date. The claim goes in the work-related expenses section of the return.

If your income is close to a threshold, a deduction can make a slightly bigger difference. How the brackets work is covered in will a pay rise push you into a higher tax bracket. Salary sacrifice is another way to lower taxable income, covered in salary sacrifice into super.

Assumptions behind the numbers

• Figures use the ATO fixed rate of 70c per work hour and the resident tax rates for 2025–26: 16% from $18,201, 30% from $45,001, 37% from $135,001 and 45% from $190,001.
• The Medicare levy is 2% of taxable income. All examples are above the range where the low-income reduction applies, and no Medicare levy surcharge is included.
• The low income tax offset is up to $700, reducing by 5c per dollar from $37,500 to $45,000 and by 1.5c per dollar from $45,000 to $66,667.
• A working day is 7.6 hours and there are 46 working weeks in the year. Your own record of hours replaces these.
• Savings are the difference in tax with and without the claim, for an Australian resident for the full year with no other deductions or offsets. Amounts are rounded to the nearest dollar.
• The chair example assumes it is used only for work. Your own position may differ, and the ATO or a registered tax agent can confirm it.