Working From Home Expenses - What You Can (and Can’t) Claim This Year

With flexible and remote work now a permanent fixture of modern business life, understanding what work-from-home (WFH) expenses are tax-deductible is more important than ever—especially for Aussie expats, business owners, and offshore entities managing staff or operations in Australia.

At World Wide Advisory, we’ve seen an increase in ATO scrutiny around remote work deductions. Whether you’re an employee working abroad, an expat earning Australian income, or an offshore business with Australian operations, it's essential to get your WFH claims right—or risk audits, penalties, or denied deductions.

What the ATO Allows: Eligible WFH Expenses

The ATO provides two main methods for claiming work-from-home expenses:

1. Fixed Rate Method (from 1 July 2022)

• Rate: 67 cents per hour

• Covers: Electricity, gas, internet, phone, stationery, and computer consumables.

• You must keep a detailed record of hours worked from home (e.g., timesheets or logs).

• Note: This rate doesn’t include depreciation of equipment—you must claim those separately.

2. Actual Cost Method

• Claim actual work-related portion of each expense (e.g., 30% of electricity if you use 30% of the home for work).

• More complex but may offer higher deductions for those with significant running costs.

What You Can Claim (If You Meet the Criteria)

• Electricity and gas (work-related proportion)

• Phone and internet usage

• Home office equipment (e.g., computers, printers) – Depreciation or full cost if <$300

• Office furniture (chairs, desks, etc.)

• Stationery and consumables

• Software subscriptions related to work

For expats and international operators, it's critical to note:

You must be earning Australian-assessable income to claim these deductions against it.

What You Can’t Claim

Not everything used in your home workspace qualifies for deductions. The ATO disallows:

• Rent or mortgage payments (unless part of your home is a place of business and not just a workspace)

• Coffee, snacks, or meals

• Personal phone use unrelated to work

• Clothing (unless it’s occupation-specific or protective)

• Home-schooling or child care costs

• General cleaning for shared household areas

Keeping Records: What the ATO Expects

To stay audit-ready, ensure you have:

✅ A 12-week logbook or continuous record of hours worked from home

✅ Receipts for any purchases over $10

✅ Proof of percentage use (e.g., internet bills showing work vs personal usage)

✅ Documentation showing the direct connection to earning income

If you're an expat, remember that the ATO applies strict residency and foreign income tests, so ensure your income and deductions are matched correctly to your residency status.

Tips for Expats & Offshore Employers

• If you're an Aussie expat still earning rental income or salary from Australia, these deductions may still apply—depending on your tax residency status.

• If you’re an offshore employer with Australian staff, you need to understand how employee reimbursements or allowances may impact your tax reporting and obligations.

Avoid ATO Red Flags

Remote work deductions are a growing area of ATO audits—particularly among those with overseas income, cross-border work arrangements, or complex business structures. Incorrect claims could lead to denied deductions or penalties.

If you're uncertain whether your WFH setup qualifies, it's best to seek tailored advise.

📞 Call us at +617 3180 1684

📧 Or email us at contact@worldwideadvisory.au

At World Wide Advisory, we specialise in helping expats, digital nomads, and offshore businesses navigate Australia’s tax landscape with confidence and clarity.