If you work from home in Australia, you may be able to claim some of your home office costs as tax deductions. However, when claims are over-estimated or not properly supported, they can attract ATO review, audits, or even penalties.

Before you claim, it’s important to understand what the ATO actually allows, and how to calculate your deductions in a way that is both reasonable and compliant.

Working from home deductions are expenses that are directly related to earning your income at home. Depending on your circumstances, these may include running costs, equipment, and in some limited situations, part of your housing costs.

If you have a clearly defined area at home that is used only for work (for example, a separate study or office), you may be able to claim a portion of:

The ATO may ask for evidence such as photos, floor plans, or explanations showing that the space is genuinely used as a dedicated work area.

If you work from shared areas such as the dining table or living room, it is usually much harder to claim housing costs, because these spaces are not exclusively used for work.

If you are using the ATO fixed-rate (cents-per-hour) method, basic running costs like electricity and internet are already taken into account. You generally cannot claim those same expenses again separately.

Even without a dedicated home office, you may still be able to claim certain work-related costs, such as:

However, personal or lifestyle expenses remain non-deductible — for example:

The ATO pays close attention to working-from-home claims. High-risk patterns include:

Importantly, “working an 8-hour day” is not the same as “8 hours working from home”. Breaks, commuting and personal time cannot be included in the hours you claim.

Working from home deductions are not free money from the ATO — they require accurate calculations, reasonable assumptions and proper documentation.

If your situation is more complex, or you are unsure what you can safely claim, FABC Accounting can help you: