Claiming Home Office Expenses: Cents per Hour Method

In 2026, working from home is the "new normal" for millions of Australians. Whether you’re a full-time remote employee or a sole trader using a spare bedroom as your headquarters, you're likely sitting on a significant tax deduction. The most straightforward way to claim this is the Fixed-Rate "Cents per Hour" Method. Here is how to use it correctly without alerting the ATO.

The 67 Cents per Hour Rate

The ATO's revised fixed-rate method is designed to be simple. For every hour you work from home, you can claim **67 cents.** This single rate is meant to cover all your "running costs," including:

• Electricity and gas (heating, cooling, lighting).
• Home and mobile phone data and calls.
• Internet usage.
• Computer consumables (ink, paper).
• Stationery.

What You CANNOT Claim Separately

This is where most people make mistakes. If you use the 67c method, you **cannot** claim a separate percentage of your internet bill or a separate deduction for your mobile phone plan. Those expenses are already in the 67c. However, you CAN still claim separate deductions for:

1. Depreciation: The decline in value of your office furniture (desk, chair) and tech (laptop, monitors).
2. Repairs & Maintenance: To these items (e.g., getting your laptop screen fixed).
3. Cleaning: Of your dedicated home office space.

Summary: Better Data, Easier Tax

While the actual "cost" of running your home office might be more than 67c per hour in 2026 due to rising energy prices, the "fixed-rate method" is much simpler to audit and requires much less paperwork. If you aren't sure which method is best for your situation, we recommend running both sets of numbers at the end of the year. At PrepMyBook, we do exactly that for our clients.