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Unlocking Tax Benefits: Navigating Your Tax Return When Working from Home, Unlocking Tax Benefits: Navigating Your Tax Return When Working from Home

Tax Returns While Working from Home: How Does That Work?

As the world adapts to remote work arrangements, many individuals find themselves working from the comfort of their homes. If you’re one of them, it’s important to understand the implications for your tax return. Working from home may entitle you to certain tax deductions and benefits.

In this blog post, we will explore how tax returns work when you work from home, including the ability to claim home office expenses and the WFH (Work From Home) rate set by the Australian Taxation Office (ATO). Understanding these aspects can help you maximize your tax benefits and optimize your financial situation. Please keep in mind that this is general advice, if you wish to seek advice on your situation, happy for you to contact one of our customer service reps who would be more than happy to take your calls & answer your questions.

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Can You Claim Working from Home on Tax?

Working from home often incurs additional expenses, such as increased electricity bills or the need for office supplies. The good news is that you may be eligible to claim some of these expenses as deductions on your tax return. Here’s what you need to consider:

Home Office Expenses

To claim home office expenses, the space you use must meet specific criteria set by the ATO. It should be used exclusively for work purposes and not for personal activities. You can claim a portion of expenses such as utilities (electricity, gas), internet bills, and even the depreciation of home office equipment. Consult with a tax accountant in Sydney to understand which expenses are eligible and how to calculate the appropriate deduction.


Maintaining accurate records is crucial when claiming working-from-home expenses. Keep track of your expenses, such as bills or receipts, and maintain a log of your work-related activities. This documentation will substantiate your claims and provide evidence in case of an audit.

What Is the WFH Rate for the ATO?Unlocking Tax Benefits: Navigating Your Tax Return When Working from Home, Unlocking Tax Benefits: Navigating Your Tax Return When Working from Home

The ATO introduced the WFH rate as a simplified method to calculate home office expenses during the COVID-19 pandemic. This method allows individuals to claim a fixed rate per hour for the additional running expenses associated with working from home. 

This however has evolved into a more sophisticated scheme due to the changes in work culture since the pandemic. 

Here’s what you need to know:

2.1. Eligibility:

The WFH rate is available for individuals who worked from home due to COVID-19 restrictions or at the request of their employer. It covers a range of expenses, including electricity, internet, phone, and a decline in the value of home office furniture and equipment.

2.2. Calculation:

The ATO sets the WFH rate each financial year, representing the average running expenses incurred while working from home. As of the current financial year, the rate is now 67  cents per hour. This means you can claim 67 cents for each hour worked from home as a deduction on your tax return. However, it’s important to note that the WFH rate covers multiple expenses and cannot be claimed in addition to claiming individual expenses separately.

Unlocking Tax Benefits: Navigating Your Tax Return When Working from Home, Unlocking Tax Benefits: Navigating Your Tax Return When Working from Home

What Percentage Can I Claim for a Home Office?

Determining the percentage you can claim for a home office depends on the proportion of the space used for work purposes. Here’s how you can calculate it:


Floor Area Method

One common method to calculate the percentage is the floor area method. Measure the area of your home office and divide it by the total area of your home. The resulting percentage represents the portion of your home-related expenses that can be claimed as deductions. For example, if your home office occupies 10% of your home’s total area, you can claim 10% of eligible expenses.

Actual Usage Method

Alternatively, you can calculate the percentage based on the actual usage of your home office for work purposes. This method requires you to keep a detailed record of the time you spend in your home office for work-related activities. By dividing the work-related hours by the total hours in a year, you can determine the percentage of expenses you can claim.

Choosing the Method

The method you choose depends on your specific circumstances and which one provides a more accurate representation of your home office usage. It’s recommended to consult with a tax accountant in Sydney to determine the most appropriate method and ensure compliance with tax regulations.


Working from home presents unique opportunities to claim tax deductions and optimize your tax return. By understanding the eligibility criteria for home office expenses and the ATO’s WFH rate, you can take full advantage of the tax benefits available. Consulting with a tax accountant in Sydney will ensure you navigate the complexities of tax returns while working from home effectively. Remember to keep accurate records, understand the applicable deductions, and stay up to date with the latest ATO guidelines for working-from-home expenses.

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