Maximise Your Home Office Deductions Using the ATO’s Fixed Rate Method

As flexible and remote working arrangements continue across Australia, the ATO's updated fixed rate method remains a popular way to claim home office expenses in 2025 income year. However, taxpayers must understand how the method works and meet recordkeeping obligations to maximise their deductions — and avoid audit risks.

Here’s what you need to know for this tax year.

📌 ATO Fixed Rate: What’s Covered in 2025 income year

The fixed rate method allows you to claim 70 cents per hour for each hour you work from home. This rate covers combined expenses such as:

• Electricity and gas
• Internet and mobile/home phone usage
• Office stationery and computer consumables (e.g. printer ink, paper)

✅ You do not need to calculate or justify individual expenses for these categories.

🚫 But you cannot claim these items separately if you use the fixed rate method.

💻 Additional Deductions You Can Still Claim Separately

You may additionally claim:

• Depreciation of office equipment and furniture (e.g. monitor, chair, desk)
• Decline in value for technology over $300 (e.g. laptops, phones)
• Repairs or maintenance to home office equipment

🏠 Occupancy costs like rent or mortgage interest are not deductible unless your home is a dedicated place of business.

✅ What You Need to Claim

To validly claim the 70c/hour rate in 2025 income year, the ATO requires:

1. A record of actual hours worked from home
• Daily logs or timesheets are required all year — no estimates allowed
2. Receipts for consumables and equipment
• These support any additional separate claims
3. Evidence of work-related use
• For assets used both personally and for work

🔍 Choosing the Right Method: Fixed vs Actual Cost

If you have significant actual expenses (e.g. large home office, higher electricity use, etc.), the actual cost method might result in a higher deduction — but it requires more detailed calculations and evidence.

We can help you compare which method suits you best.

📣 Key Reminders for 2025 income year

• Start your daily log now — it's required from 1 July 2024 to 30 June 2025
• Review asset purchases and usage to maximise additional claims
• Avoid common mistakes like double-claiming expenses covered by the fixed rate
• Reach out before lodging to check you’re claiming everything you’re entitled to

We're here to guide you through your options, recordkeeping requirements, and deduction strategies. Let's ensure your 2025 return is accurate and optimised.

Disclaimer for External Distribution Purposes:

The information contained in this publication is for general information purposes only, professional advice should be obtained before acting on any information contained herein. The receiver of this document accepts that this publication may only be distributed for the purposes previously stipulated and agreed upon at subscription. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.

Are you looking for an advisor that will keep you up to date and provide guidance and tips like in this blog? Then why not contact me at our Falconbridge office or Luera office in Blue Mountains office to arrange a one-on-one consultation. Just Book Free Consulation up on the right to find the appointment options.

 Yan Qi CA

Mobile: 0403 050 779

This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This website provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.