✅ Updated for 2025–26 — revised ATO rates

Short answer: yes, tradies can claim home office expenses — but only for the portion of time you actually work from home on business tasks. Here's what qualifies, which method to use, and how to calculate your claim correctly.

📋 In This Article

  1. →What qualifies as home office work?
  2. →The two ATO methods
  3. →Fixed rate method (67c/hr)
  4. →Actual cost method
  5. →Record keeping required
  6. →FAQs

What Qualifies as Home Office Work for Tradies?

The ATO allows home office deductions for work you do from home as part of running your business. For self-employed tradies, this typically includes:

  • Writing and sending quotes and invoices
  • Responding to client calls and emails
  • Ordering materials and supplies online
  • Bookkeeping and reconciling accounts
  • Preparing your BAS
  • Researching products, suppliers or codes
  • Any other administrative work done at home for your business

You do not need a dedicated home office to claim. Working from the kitchen table counts. You do need to actually do the work — you can't claim for time you're not working.

The Two ATO Methods

The ATO provides two methods for calculating home office expenses. You can choose whichever gives you the better deduction — but you must apply one method consistently for the whole year.

Method 1: Fixed Rate Method (67 cents per hour)

The simplest method. For every hour you work from home on business activities, you can claim 67 cents. This covers electricity, gas, internet and phone costs — but not depreciation of home office equipment (that's claimed separately).

How to calculate: Keep a log of hours worked from home. Multiply by 67 cents.

Example: If you spend 10 hours per week at home on quotes, invoicing and admin × 46 working weeks = 460 hours × $0.67 = $308.20 deduction for the year.

For many tradies who do a moderate amount of home admin, this adds up to $200–$500/year with minimal record-keeping effort.

Method 2: Actual Cost Method

More complex but potentially higher deduction. You calculate the actual work-related percentage of each home running cost — electricity, gas, internet, cleaning, decline in value of furniture.

You need to establish the work area as a percentage of your total home floor area, and apply that to eligible expenses. This method requires more detailed records and is generally only worth it if you have a dedicated home office and significant home running costs.

Most tradies are better off with the fixed rate method — it's simpler and the deduction is reasonable for the admin time most tradies actually spend at home.

Record Keeping

Fixed rate method: Keep a diary or log of hours worked from home. The ATO requires this — you can't just estimate. A phone notes app, Google Calendar entries or a simple spreadsheet all work. You must keep this for the full year, not just a sample period.

Actual cost method: Keep utility bills, receipts for home office equipment, a floor plan or measurements to establish work area percentage, and records of all home running costs claimed.

💡 Quick tip:

Use a simple phone habit: at the start of every home admin session, start a timer. Log the hours weekly. Takes 30 seconds and gives you an auditable record the ATO would accept.

Can I claim home office AND the 67c/km vehicle deduction?

Yes — these are separate deductions. The home office claim covers working from home. The vehicle deduction covers driving between job sites. They don't overlap.

Can I claim my home office if I rent?

Yes — renters can claim home office expenses using either method. Note that unlike homeowners, claiming a dedicated home office area doesn't create a capital gains tax issue at sale for renters.

What about internet and phone — aren't those covered separately?

Under the fixed rate method (67c/hr), your internet is covered in the rate — you can't also claim your internet plan separately. Under the actual cost method, you calculate internet separately. For your mobile phone, the work-use percentage is always claimed separately regardless of which home office method you use.

What if my partner also works from home?

Each person can only claim for the hours they personally work from home. If you both use the same space, you can each claim for your own hours — you don't split a single deduction between you.