Working from home is the new normal for many Australians — but are you claiming the right tax deductions?

In July 2025, the ATO updated its fixed rate method for work-from-home (WFH) expenses. If you do any work from home, you could now claim $0.70 per hour as per the 2024-2025 income year — but only if you follow the latest rules.

A warm-toned home office setup with a person working on a laptop showing financial spreadsheets, surrounded by tax documents, a phone with a calendar app open, a sticky note pad, and a coffee mug — representing work-from-home tax preparation for Australian taxpayers in 2025.

Here’s a clear, simple breakdown to help you understand how the fixed rate works, who can use it, and how Tax NextGen helps you get it right.

What Is the Fixed Rate Method for WFH?

Under the updated ATO guidelines (effective from 1 July 2022 onwards), the fixed rate method lets individuals claim $0.70 per hour worked from home for certain running expenses.

This rate covers:

  • Electricity & gas (lighting, heating, cooling)
  • Internet expenses
  • Phone usage (mobile & landline)
  • Home office cleaning and consumables

It does NOT include:

  • Office furniture depreciation
  • Equipment (laptops, desks, chairs)
  • Occupancy costs like rent or mortgage interest
  • To claim those, you must use the actual cost method

What’s New in 2025?

The biggest change isn’t the rate — it’s the record-keeping.
In 2025, you must:

  • Keep a detailed record of hours worked from home — a daily diary, spreadsheet, or calendar
  • Keep at least one bill or receipt for each type of running expense (internet, phone, etc.)
  • You can’t estimate hours based on a representative 4-week sample like before. You need full records across the year.

Who Can Use the Fixed Rate Method?

You can use this method if:

  • You perform your job duties from home (not just answering calls occasionally)
  • You pay for home running costs out of pocket
  • You keep the required records

It’s ideal for:

  • Salaried employees working hybrid or remote
  • Freelancers and gig workers with a home base
  • Students balancing remote jobs with study

Common Mistakes to Avoid

  • Guessing your WFH hours
  • Not keeping internet or phone bills
  • Claiming expenses twice (e.g., fixed rate + laptop)

The ATO is closely watching these deductions — over 140,000 returns were amended last year due to errors.

How Tax NextGen Helps You Get It Right

At Tax NextGen, we’ve helped thousands of Aussies correctly claim WFH deductions — especially those who juggle multiple income types.

Here’s how we support you:

  • We check your WFH eligibility before you file
  • We help set up compliant hour-tracking logs
  • We guide hybrid workers, freelancers & low-income earners on what you can and can’t claim
  • We support you in your language — whether it’s Hindi, Mandarin, Tamil, and others

“Many thanks to the team at NextGen, who essentially turned my position around $26k with their services. I’m grateful to all involved and would highly recommend them to process your tax returns!” — Real client, 2023

Final Tips Before You Lodge

  • Start tracking your WFH hours from 1 July onwards
  • Save copies of phone and internet bills
  • Don’t rush your return — wait for ATO pre-fill if possible
  • Get a second look from a tax expert (like us!) if unsure