With remote and hybrid work now firmly embedded in Australian working life, many taxpayers are asking the same question: can you legally claim home office expenses for tax? The short answer is yes — but only if you meet specific criteria under Australian Financial Service and Tax Law.

Understanding what you can claim, how to calculate it, and what evidence is required is essential to staying compliant while maximising your deductions. This guide breaks it all down in plain English.

What Is Considered a Home Office Under Australian Tax Law?

Under Australian tax law, a home office is an area of your home used for work-related purposes. However, not all home offices are treated equally.

The Australian Taxation Office (ATO) distinguishes between:

• A home office used for convenience, such as working at the dining table
• A place of business, which is a dedicated, exclusive work space

This distinction is critical under Financial Service and Tax Law, as it determines which expenses you can legally claim.

Running Expenses vs Occupancy Expenses

Running Expenses (Most Common Claims)Most employees and contractors can claim running expenses, which include:

• Electricity and gas
• Internet and phone usage
• Office furniture depreciation
• Stationery and computer consumables

 These expenses relate to the cost of using your home for work, not owning it.

Occupancy Expenses (Stricter Rules)Occupancy expenses include:

• Rent
• Mortgage interest
• Council rates
• Home insurance

 These can only be claimed if your home office qualifies as a place of business. This usually applies to self-employed individuals rather than employees.

Claiming occupancy expenses incorrectly is one of the most common red flags under Australian Financial Service and Tax Law.

Methods for Claiming Home Office Expenses

Fixed Rate MethodThe ATO allows a fixed hourly rate to cover multiple running expenses. This method is simpler but may result in a lower deduction.You must keep:

• A record of hours worked from home
• Evidence of additional expenses not included in the rate

Actual Cost MethodThis method involves calculating the actual work-related portion of each expense.

While more complex, it can lead to higher deductions if supported by accurate records.

From a Financial Service and Tax Law perspective, accuracy and documentation are critical with this method.

Record-Keeping Requirements

To legally claim home office expenses, you must keep:

• Receipts and invoices
• Utility bills
• Internet and phone statements
• A diary or logbook of work hours

The ATO can audit claims up to several years later, so proper record-keeping is non-negotiable under Australian tax law.

Who Can Claim Home Office Expenses?

You may be eligible if you are:

• An employee working from home
• A sole trader or contractor
• A small business owner

However, you cannot claim expenses that have already been reimbursed by your employer.

This is a key compliance issue under Financial Service and Tax Law, particularly for salaried employees.

Common Mistakes to Avoid

Many taxpayers unintentionally breach tax law by:

• Claiming personal expenses
• Overestimating work-related use
• Claiming occupancy expenses without qualification
• Failing to keep records

The ATO has increased data-matching and audit activity, making accurate claims more important than ever.

Why Financial Service and Tax Law Advice Matters

Home office claims may seem simple, but they sit at the intersection of taxation, compliance, and financial planning.

Professional advice ensures:

• You claim the maximum legal deduction
• Your claims align with current tax law
• You reduce audit risk
• Your financial position remains compliant

A qualified adviser specialising in Financial Service and Tax Law can assess your individual circumstances and apply the correct claiming method.

Suggested External Links:

• Australian Taxation Office (ATO) – Home Office Expenses Guide
• Australian Government – Business
• Chartered Accountants Australia & New Zealand
• Tax Practitioners Board (TPB)

Unsure whether you’re claiming correctly?

Speak with a qualified professional specialising in Financial Service and Tax Law.

To ensure your home office deductions are accurate, compliant, and optimised.

Contact New South Lawyers today and take the stress out of tax season.