Disclaimer: This article provides general information only and is not intended as tax, financial, or legal advice. Tax laws and ATO rulings change regularly. Always consult a qualified tax professional or registered tax agent for advice specific to your circumstances. For the latest official guidance, visit the Australian Taxation Office website.
If you work from home — whether full-time, part-time, or even just a day or two a week — you’re likely entitled to claim tax deductions on a range of home office expenses. And yet, many Australians either don’t claim at all or don’t claim everything they’re entitled to, leaving hundreds or even thousands of dollars on the table each year.
This guide covers the two ATO-approved methods for claiming home office running expenses in 2025-26, what furniture and technology you can deduct, how depreciation works for items over $300, and what records you need to keep.
Who Can Claim Home Office Deductions?
You can claim home office deductions if you incur expenses as a direct result of working from home. This applies to employees, sole traders, contractors, and freelancers. Important conditions:
- You must actually incur the expense yourself (not reimbursed by your employer)
- The expense must be directly related to earning your income
- You must have records to prove the expense and the work-related use
- If an expense has both work and personal use, you can only claim the work-related portion
Method 1: Fixed Rate Method (67 Cents Per Hour)
The simpler method. Claim a flat rate of 67 cents per hour for every hour you work from home. This rate covers electricity and gas, phone and internet, stationery and computer consumables, and depreciation of furniture.
What it does NOT cover (claim separately): Depreciation of technology equipment (laptops, monitors, phones, printers).
Example: 5 days/week × 8 hours/day × 48 weeks = 1,920 hours × $0.67 = $1,286.40 deduction
Method 2: Actual Cost Method
Calculate the actual costs you incur for each expense category and claim the work-related portion. More effort but can result in a higher deduction if your actual costs are significant.
Claiming Furniture and Equipment
Items Under $300
Claim the full cost as an immediate deduction in the year you buy it. Examples: desk lamps, keyboard and mouse, basic monitor arms, stationery, webcam or headset.
Items Over $300
Depreciate over the item’s effective life:
| Item | Effective Life | Depreciation Rate |
|---|---|---|
| Office desk | 10 years | 20% |
| Office chair | 10 years | 20% |
| Laptop computer | 4 years | 50% |
| Monitor | 4 years | 50% |
| Printer / scanner | 5 years | 40% |
| Phone / mobile | 3 years | 66.67% |
Tips to Maximise Your Deductions
- Track your hours consistently using a spreadsheet or time-tracking app
- Compare both methods before lodging your return
- Don’t forget items under $300 — small purchases add up
- Claim the work-related percentage honestly
- Buy before 30 June to start claiming deductions sooner
- Invest in quality items that last from Home Sweet Office
Frequently Asked Questions
Can I claim home office deductions if I only work from home part of the week?
Yes. Claim based on the actual hours you work from home, regardless of whether it’s one day a week or five.
Which method gives a bigger deduction?
It depends on your circumstances. Calculate both and choose the higher one.
Can I claim the full cost of a new desk or chair in the year I buy it?
Only if it costs $300 or less. Items over $300 must be depreciated over their effective life.
Is home office furniture from Home Sweet Office tax deductible?
Yes. Home office furniture purchased for work-related use is generally tax deductible, either as an immediate deduction (items $300 or less) or through depreciation (items over $300).
Remember: This article provides general information only. Consult a qualified tax professional for advice specific to your situation. For official guidance, visit ato.gov.au.
Invest in your home office setup — and claim it on your tax return. Browse tax-deductible home office furniture and technology at Home Sweet Office. Free shipping Australia-wide.