Maximise Your WFH Tax Claims the Smart Way
With the rise of flexible work arrangements, working from home has become a standard working condition for many Australians.
However, what most don’t realise is that their home workspace isn’t just the centre of productivity, it can also be a valuable source of tax savings. In fact, with the right approach, you can maximise your WFH tax claims and make the most of your eligible deductions.
That said, navigating the Australian Taxation Office (ATO) rules can surely be tricky. The guidelines are quite specific about what you can claim as well as how those claims should be calculated. To truly maximise your refund while staying compliant, it’s important to take a strategic and accurate approach.
So, how can you do it? Read on to find out!
Understanding WFH Tax Claims
When you work from home, you’re using personal resources to perform work-related tasks. The ATO recognises that as well as allows deductions for additional costs directly related to your work. In fact, around 9 million Australians claimed approximately $28 billion in work-related expenses in their 2023–24 tax returns, many of which were linked to working from home.
However, not every expense qualifies. You can only claim the work-related portion of your costs, and you must be able to prove your claim with accurate records.
Here are some of the most common expenses you can claim for working from home:
Category | Claimable? | Example |
Electricity & gas | Yes | Power for lighting, heating, or cooling your workspace |
Internet & phone | Partial | Work-related percentage only |
Equipment depreciation | Yes | Computer, monitor, office chair |
Furniture | Sometimes | Must be primarily for work |
Rent or mortgage | Sometimes | If you run a home-based business |
Common Mistakes That Cost Money (or Trigger ATO Audits)
Every year, thousands of Australians either miss out on legitimate deductions or face scrutiny from the ATO due to incorrect claims. Understanding these common mistakes can significantly help you avoid costly errors and stay compliant.
1. Guessing Your Hours or Expenses
For one thing, the ATO doesn’t accept rough estimates or assumptions. You must keep accurate records such as timesheets, rosters, or a diary showing your work hours to support your claims. Guessing your usage may lead to rejected deductions or, worse, an ATO audit.
2. Claiming Personal Use as Work-Related
One of the most frequent errors is claiming the full cost of expenses that are partly for personal use. For example, the ATO cited an instance where a truck driver tried to claim swimwear because it was hot where they stopped in transit and they wanted to go for a swim. The claim was denied as these expenses are basically personal in nature. It’s important to carefully consider whether an expense is truly related to your business activities before claiming it on your taxes.
3. Using Outdated ATO Rates
The ATO updates its fixed rate as well as calculation methods periodically. Using outdated rates from previous financial years can result in incorrect claims. Before lodging your return, always check the latest ATO guidelines for WFH deductions to make sure your calculations are accurate. The ATO also has a free home office expenses calculator that can help you determine the correct deductions.
4. Failing to Keep Receipts
Documentation is everything when it comes to tax deductions. The ATO requires you to retain proof of expenses. This includes receipts, invoices, and bills for at least five years from the date of your tax return. Without evidence, your claims can be disallowed even if they’re legitimate.
How to Maximise Your WFH Tax Claims the Smart Way
To make your home office deductions will certainly work harder for you, it’s important to claim strategically and stay fully compliant with ATO guidelines. Here are some smart, practical ways to maximise your WFH tax claims without crossing the line.
1. Track Your WFH Hours
Accuracy matters so you must keep a detailed, ongoing log of your work-from-home hours. You an use a digital timesheet, work diary, calendar entries, or any aid that can surely help you. The ATO expects clear evidence to support your claim, as well as consistent record-keeping ensures you can justify every deduction if ever questioned.
2. Keep Every Receipt
Good record-keeping is your best defence. Store all your bills, invoices, as well as purchase confirmations in a dedicated digital folder, ideally in cloud storage for easy access. This habit not only helps you stay organised but also ensures you’re audit-ready if the ATO requests supporting documents.
3. Separate Personal and Work Use
It’s essential to claim only the work-related portion of shared expenses such as your phone, internet, or utilities. Estimate your percentage of work use based on actual data like call logs or data usage reports. For instance, if 70% of your internet activity is for work, you can claim 70% of that cost. Accurate allocation surely protects you from over-claiming and potential ATO scrutiny.
4. Don’t Forget Equipment Depreciation
Office equipment and furniture such as laptops, monitors, desks, and ergonomic chairs can often be claimed over their effective life through depreciation. Instead of claiming the full cost upfront, you can spread the deduction across several years. Consulting a tax adviser ensures you’re applying the correct depreciation rate and method.
5. Compare Both ATO Methods
ATO allows two main ways to calculate WFH deductions: the fixed rate method and the actual cost method. Each has its own advantages depending on your expenses and work setup. Sometimes the fixed rate provides simplicity; other times, the actual cost method yields a higher deduction. A qualified tax expert can analyse both to identify which works best for you.
6. Stay Updated on ATO Rules
Tax rules evolve regularly, especially as remote work becomes more common. Staying informed obviously guarantees your claims remain compliant and optimised. Moreover, professional tax advisers monitor ATO updates closely. They can also help you take advantage of new deduction opportunities while avoiding outdated practices.
When to Seek Professional Help
While it’s entirely possible to lodge your own WFH tax claims, seeking professional assistance can save you from costly mistakes. In addition, they often uncover additional deductions you might otherwise miss.
You should also consider speaking with a qualified tax professional if you want to make sure your claims are both fully compliant and optimised. A tax professional doesn’t just process your return, they analyse your unique circumstances, identify every legitimate deduction, choose the most beneficial calculation method, as well as ensure your claims align with ATO requirements.
And here’s an added bonus: the cost of your tax consultation or return preparation is itself tax-deductible.
Work Smarter. Claim Smarter.
Claiming work-from-home expenses is one of the most effective ways to significantly maximise your tax refund, but only if you do it correctly.
With the ATO tightening its record-keeping and audit requirements, accuracy as well as compliance have never been more important. Obviously. the smartest move is to seek professional guidance so you can claim with confidence and avoid unnecessary stress.
At Bodeccia, we specialise in helping individuals navigate the complexities of work-from-home tax deductions. Our experienced team ensures your claims are accurate, compliant, and fully optimised to maximise your refund potential altogether.
