The Australian Taxation Office (ATO) has officially raised the hourly rate used under the fixed rate method for claiming working-from-home tax deductions, increasing it from 67 cents to 70 cents per hour, effective July 1, 2024.
This change applies to the upcoming 2024–25 income year and reflects updated household expense data used to calculate work-related claims.
According to Yahoo Finance, the ATO confirmed that the updated rate is based on recent cost analysis but does not modify the types of expenses covered. The revision could lead to slightly larger tax returns for millions of Australians working remotely throughout the year.
Revised Rate Reflects Increased Household Expenses
Australians working from home can now claim 70 cents per hour as a flat-rate deduction on their 2024–25 tax return. The new rate applies to all hours worked from home throughout the income year and represents a modest increase over the previous rate of 67 cents.
For example, someone working 38 hours a week from home could now claim $1,383.20 annually, up from $1,323.92, resulting in a $59 increase.
“The rate has been updated based on Australian Bureau of Statistics data for relevant expenses included in the rate,” an ATO spokesperson told Yahoo Finance.
“The update to the rate does not alter the expenses included under the method or eligibility criteria.”
Simplified Method Targets Common Household Costs
The fixed rate method is designed to streamline tax deductions by allowing workers to claim a consistent amount per hour, instead of calculating individual expenses.
“The fixed rate method allows for the taxpayer to claim an hourly rate amount for every hour they work from home,” the ATO spokesperson said.
“It is designed to simplify the calculation and the records required to claim working from home expenses.”
The 70-cent rate includes common running costs, such as :
- Electricity and other energy bills
- Internet
- Phone usage
- Stationery
- Computer consumables
Items like office furniture, computers, and other technology—which are considered depreciating assets—are not included and can be claimed separately based on work-related use.
Record-Keeping Remains a Core Requirement
Regardless of the method used, proper record-keeping is essential. For those claiming the fixed rate, taxpayers must maintain evidence of all hours worked from home during the year.
Acceptable forms of documentation include timesheets, rosters, or a work diary. Time spent on annual leave, personal leave, public holidays, or other non-working periods must be excluded from the total.
“You can use the method that gives you the best outcome, provided you’ve kept the right records,” the ATO spokesperson added.
Choice of Method Depends on Individual Circumstances
In addition to the fixed rate, taxpayers may opt to use the actual cost method, which allows them to claim precise amounts for each expense incurred. This method may yield a higher deduction in some cases but requires comprehensive documentation of all work-from-home expenses.
The fixed rate method remains a popular option due to its simplicity. In 2023, approximately four million Australians claimed remote work deductions, and more than half used the fixed rate method.
