Energy Tips
Work From Home in Australia? Here’s How to Claim Energy Expenses
Tax season is around the corner, and if you work from home, you’ll need to calculate anything and everything
Important Points
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Aussies who work from home may be eligible to claim part of their energy and running costs on their tax return, but ATO rules must be followed carefully.
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It’s worth reviewing your chosen method each financial year, as energy prices or work patterns can change what’s most beneficial.
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Getting advice from a registered tax professional can help ensure your claims are compliant and maximise your potential refund.
Ever since the pandemic, working from home has become standardised across the country. With that being said, when tax time rolls around, many people are now wondering: “Can I deduct the extra cost of electricity, heating, cooling, and lighting if I work from home?”
The short answer: yes. But the rules are detailed, and getting it wrong can attract some much-maligned scrutiny from the ATO.
Note: The information in this article is general in nature and based on publicly available ATO guidance as of 2025. Always check the latest ATO rules or speak with a registered tax professional before making any claims.
Are You Eligible to Claim? Here’s What Counts as “Working From Home”
To claim running costs (including your energy) as a deduction, you must:
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Be working from home to fulfil your employment duties, not just doing the odd check-in or emails.
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Incur additional running expenses directly because of working from home.
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Keep records and evidence that the expense was incurred and is work-related.
Expert Tip
You can’t claim your entire household electricity bill, only the portion that relates to your work use.
Two Ways to Calculate Your Claim: Fixed Rate vs. Actual Cost
1. Fixed Rate Method (per hour worked at home)
This method is straightforward: you claim a flat rate per hour worked from home, which covers home office costs, including energy, internet, phone use, etc.
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In 2024-25, the ATO has set that rate at 70 cents per work hour.
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That 70c rate already covers electricity, gas, lighting, internet, phone usage, stationery, and computer consumables.
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If you use this method, you cannot separately claim those items again (or ‘double-dipping’)
To use this method, you must keep a record of how many hours you worked from home during the income year (timesheets, logs, etc.)
2. Actual Cost Method
This method involves itemising the actual expenses you incur because of working from home and claiming the portion that is directly related to your work.
You can separately claim:
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Electricity and gas (heating, cooling, lighting)
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Phone and internet (apportioned to work use)
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Depreciation on home office furniture, equipment
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Cleaning (if you have a dedicated work area)
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Repairs, maintenance, etc.
However, this method requires more in-depth record-keeping, including bills, receipts, logs, and apportionment.
Which method is better?
It depends on your circumstances and preferences. For many people working part-time from home, the fixed rate is easier. If you have high energy costs or expensive equipment, the actual cost method might yield a larger deduction, but only if you keep organised records and keep a detailed record of every expense.
Example: What Your Energy Deduction Might Look Like
Let’s say you worked from home 1,000 hours in a financial year. Under the fixed rate:
1,000 hours × $0.70 = $700 in running cost deductions
This amount broadly captures your energy, internet, phone, and consumables.
If, instead, you used the actual cost method, and you calculate that 30% of your electricity, 40% of your internet, and 50% of your phone is work-related, plus depreciation and office equipment, your total claim might be higher, but only if your records support it.
Tips to Maximise and Safely Claim
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Keep records! You’ll need timesheets, diaries, and bills. The ATO emphasises accurate record-keeping, not estimates.
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Don’t “double dip.” If you choose the fixed rate method, you can’t separately claim the items that are already covered (e.g. electricity, internet, stationery).
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Review your method each year. One year, a fixed rate might be more beneficial; next year, the actual cost may be better, depending on usage or energy price changes.
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Get professional advice if it gets complex. If you have a dedicated office, big equipment or a mix of business/home use, a tax professional can help you choose the best method.
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Avoid aggressive or inflated claims. The ATO has flagged more scrutiny on work-from-home deductions. Overclaiming or poorly substantiated claims can trigger audits.
Final Thoughts
Yes. If you work from home in Australia, you can claim energy and related expenses. But it’s not that simple. You must follow ATO rules, choose one method (fixed rate or actual cost), keep accurate records, and only claim the work-related portion.
If your situation is more complicated (home business, split use, major equipment), it’s worth consulting a tax professional beforehand.
Author
Benjamin TomBenjamin is a utility specialist passionate about creating informative content about the energy, internet, and solar markets. With extensive experience in the telecommunications industry, Benjamin drives our unique blog posts, articles, and reviews. He is focused on breaking down the technical jargon so our readers can better understand the telco market and industry. Whether he is comparing the latest internet deals or creating unique guides, Benjamin takes great pride in creating helpful, easy-to-read content.
