Work-from-home deductions: the records you need to keep

Work-from-home claims are where the ATO tightened record-keeping hardest in recent years, and where most people's evidence is thinnest. The rules differ by method, so the first question is which one you're claiming under — and the second is whether your records would survive the question "prove it".

The fixed-rate method: hours, actually recorded

The fixed rate (70 cents per hour from 1 July 2024) bundles electricity, gas, internet, phone, stationery and consumables into one per-hour figure. Its record-keeping requirement is famously the one people fail:

• A record of your actual hours worked from home across the whole year — a diary, timesheets, rosters, or a calendar kept as you go. Since the 2023 rule change, a "representative four-week period" is not enough for this method, and neither is a July estimate of what the year probably looked like.
• One bill per bundled cost — at least one document per expense type (an electricity bill, an internet bill) showing you actually incurred the costs the rate covers. If the bill's in a housemate's or partner's name, keep evidence you contribute.

The hours record is binary: kept as you went, or not valid. A recurring calendar block, a note in your phone each Friday, or your employer's hybrid-work roster all work — pick the one you'll actually maintain.

The actual-cost method: bills and a basis

Actual cost claims the work-use share of your real expenses, and pays better when your bills are high or your at-home hours modest. It wants more paper:

• Every bill you're claiming a share of — electricity, gas, internet, phone, cleaning — for the whole year.
• A defensible work-use percentage per expense, and here a four-week representative diary is acceptable for establishing the pattern.
• Receipts for consumables claimed outright — printer ink, paper, stationery.

The failure mode is different: not missing hours, but missing bills. Twelve months of electricity and internet is 20-odd documents, most of them emailed, and the claim is only as complete as the pile. This is exactly the problem inbox scanning or an auto-forward rule solves without you thinking about it — the bills file themselves as they arrive.

Either way: assets are extra, with their own records

Desks, chairs, monitors, laptops sit on top of both methods as depreciation claims. Keep the purchase receipt (it needs to survive the asset's effective life plus five years), note the work-use percentage, and remember the $300 line: items at $300 or less can be claimed in full in the purchase year; above it, they depreciate.

Choose the method with arithmetic, not vibes

Since the records differ, the smart move is keeping enough for both until the numbers pick a winner: log your hours and let the bills accumulate, then compare at year end. The Paper Keep's WFH estimator does the comparison — map your utility categories once and every captured bill feeds the actual-cost side automatically; enter your hours pattern and the fixed-rate side computes itself; mark the laptop as a work asset and depreciation stacks on top. You see both totals side by side before committing to either. (More on how it works in estimating your WFH deduction.)

The five-year footnote

All of it — the hours diary, the bills, the asset receipts — falls under the standard five-years-from-lodgment retention rule. A claim you can't re-evidence in year four was never really substantiated; durable storage is part of the claim, not an afterthought. As always, ato.gov.au has the authoritative detail, and this article isn't tax advice.

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