A deduction lowers your taxable income, so its real value is what you claim multiplied by your marginal rate: claim $2,000 at a 30% rate and you save around $600 in tax. Working from home is where most people leave money on the table, alongside a handful of everyday work costs that quietly go unclaimed year after year.
The three rules behind every claim
Three conditions apply to everything below. Miss one and the claim doesn't stand, however work-related it feels.
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, so 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, not an estimate.
A diary, roster or timesheet all work, but a guess doesn't. You can still separately claim the work-related decline in value of bigger items like a desk, chair or laptop, on top of the 70c rate.
Fixed-rate vs actual-cost
The alternative actual-cost method claims the real work-related portion of each running expense instead of the flat rate. 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 every bill. For most people the 70c rate is simpler and close enough; the actual-cost method only pays off once your real costs clearly outstrip it.
Car and travel
If you use your own car for work, not the normal commute, there are two ways to claim it, and you pick whichever gives the better result:
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. No receipts needed, but keep a record of how you worked the kilometres out.
Above 5,000 km, or to claim more than the cap allows, you need a logbook and actual expenses: the work-use share of fuel, servicing, insurance, registration and decline in value, worked out from a twelve-week logbook.
The everyday claims people miss
Beyond the home office and the car, a handful of ordinary work costs are deductible and often go unclaimed.
Tools and equipment for your job costing $300 or less come off in full, in the year you buy them.
Anything over $300 is claimed gradually as it wears out, which the ATO calls a decline in value.
Keep the records
The ATO is explicit: no record, no claim. Apps that capture this as you spend save the EOFY scramble, which is exactly the gap PFO is built to close.
- Receipts for anything you're claiming.
- A WFH hours log, a diary, roster or timesheet of your actual hours, not an estimate.
- A note of any work-use percentage, and how you worked it out, for anything used for both work and home.
Add your WFH hours, business kilometres and other claims for a 2026-27 estimate, and the tax it saves.
General information only, not tax advice. Eligibility depends on your circumstances, so check the ATO or a registered tax agent for your situation.