• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Etax - 2025 Tax Return Online

Tax returns are easy at Etax

  • Home
  • “How To”
  • Tax Calculator
  • FAQ
  • Info
    • Etax Blog
      • Tax Advice
      • Tax Guides for Your Job
      • Your Tax and Finances
      • Tax News
    • Etax tax services: Tax agent online services
    • Tax Return Checklists
    • Non-Lodgement Advice
    • Tax Free Threshold
    • “Tax Refunds 101”
  • About
    • Contact
    • Reviews and Feedback
    • More About the Online Tax Return
    • Tax Return Preparation Fees
    • People at Etax
    • Careers
  • Password Help
  • Login

Actual Cost Method

Actual cost method could see you get more in your tax return this year, is it right for you?
Make sure you’re using the best method to claim your work from home expenses this year, whether using actual cost method or the revised shortcut method.

The Actual Cost Method is one of two methods available to taxpayers to claim their work from home expenses. As opposed to the fixed cost method where you claim 67c per hour worked from home, the actual cost method involves claiming the actual cost you incurred for items like phone, internet and electricity while working from home.

Am I eligible to use the actual cost method?

Not everyone can use the actual cost method to claim work from home deductions. You must meet the following criteria to claim home office expenses using the actual cost method on your tax return:

  • Your work from home resulted in additional expenses. (For example you used your home Internet to work instead of the company internet in the office).
  • You have a record of purchases (receipts) and bills related to your expenses.
  • You have a record of the days your worked from home during the year.
  • You have a dedicated work space that is not used by other members of your household. (E.g a home office, or spare room in your home).

Standard deduction rules also apply here. You must have paid for the expense yourself, you must apportion bills so you’re claiming only the ‘work related’ portion of them and you can’t have been reimbursed by your employer.

This method is beneficial if you pay board rather than rent or a mortgage since it allows you to claim the actual working from home expenses you incurred. Without paying rent or a mortgage, you cannot claim using the 67c method.

If you’re not eligible to claim using actual cost method, read our article on how you might instead be able to claim 67c per hour worked from home.

What can I claim using the actual cost method?

This varies from person to person, but any additional out of pocket expense you have due to working from home can usually be claimed on your tax return. Common items include:

  • Electricity and gas
  • Phone expenses (home and mobile)
  • Internet
  • Stationery and computer consumables
  • Home office cleaning expenses
  • Depreciation on assets over $300
  • Assets under $300

What can’t I claim?

You can only claim on items that have resulted in additional running expenses that have been paid out of your pocket. Any item that has been paid for or reimbursed by your employer can’t also be claimed on your tax return.

Actual Cost Method Example:

Audrey works from home 3 days per week in her dedicated home office. Her employer provides her with a laptop and mobile phone to use for work. They also reimburse her for any stationery she purchases for her job. However, Audrey pays for her electricity, internet and office furniture herself.

Therefore, Audrey can claim an apportioned amount of her electricity and internet bills as well as her office equipment. However, she is unable to claim the laptop and mobile phone as her work provides them. She also can’t claim her stationery costs as her employer reimburses her for those.

Record keeping

To ensure you maximise your tax refund and don’t run into ATO trouble, it is important to keep accurate records of everything you claim on your tax return. To claim using the actual cost method, you must keep the following records:

Work from home records should show either:

  • Number of actual hours you worked from home during the financial year (spreadsheet, timesheet, time-tracking app)
  • Usual work pattern over a 4-week period (diary, roster)

Expenses:

  • Receipts, bills, other documentation that shows proof of the expenses you claim.

How do I know if actual cost method is right for me?

There are benefits to using both the fixed rate method (67c per hour) and the actual cost method. It will depend on your personal circumstances as to which method is best for you.

Don’t worry though! You won’t need to work this out for yourself if you use Etax. Simply enter all of your work from home deduction information in our tax return. Then, we’ll automatically work out which deduction method gives you the biggest refund and apply that to your return.

Ready to get your refund?

It takes just a few minutes online, with live online support to help boost your refund.

Get Started NowReturning Users Login

Popular Articles

  • 5 Smart Ways to Spend Your Tax Refund
  • Tax Deductions for Nurses (with infographic)
  • Being made redundant could re-ignite your career
  • 10 Easy Ways to Pay Less Tax
  • Manage Your Receipts and Boost Your Tax Refund
  • How To Use a Car Logbook
  • Claim Work-Related Travel Expenses
  • How Much Super Will Be Enough?
  • Deductions for Rental Property Owners
  • Simple Ways to Improve Your Tax Refund

Primary Sidebar

Do Your Tax Return Online in Minutes

Get Started Now

Returning Users Login

Click here for password help.

Your return will be reviewed and checked twice before lodgement – giving you the confidence it was done right.

Important Dates and Tax Deadlines

2025 Tax Return
For your income between
01 July 2024 – 30 June 2025
Ready on 1 July!

2024 Tax Return
For your income between
01 July 2023 – 30 June 2024
Overdue – click to start now

All Other Years 
Lodge prior year tax returns – click to learn more

You can do your tax return right now, online, with friendly support

Search

Finish your tax return in minutes

Get Started NowReturning Users Login

Forgot your password? Click here for login help


Verified Security

Etax Accountants Secure SSL Encryption

Registered Tax Agent
TPB Registration #69399005

Etax Accountants is a TPB registered tax agent

Accredited Members
Etax Accountants is a CPA Practice

Etax is a member of CPA Australia

Quality Assurance

Etax maintains ISO 9001 certification for quality management systems

Information Security

Etax holds the ISO 27001 information security certification

Popular Pages

► Get Started (new users)

► Login (existing users)

Password & Login Help

myTax, e-tax, tax agents…?

Tax Return Calculator

Tax Help in 40 Languages

About Tax Agents

Tax Online: Your Options

Etax Reviews

myGov Tax Return and Etax

myTax vs Etax.com.au

Find Tax Deductions

The Etax Blog: Tax Tips

Important Links

What’s New at Etax

2024 Tax Return

Tax Deduction Basics

The Etax Mobile App

Online Safety

Terms and Conditions

Security | Privacy

Etax FAQ

Income Statement

Where’s My PAYG?

Download Etax Resources

Late Tax Returns

Non-Lodgement Advice

Tax Checklists

Etax Careers

 

Etax is Australia's #1 online tax service

© Copyright 1998–2024 Etax Accountants Pty Ltd
Etax® is a Registered Trade Mark of Etax Accountants Pty Ltd
Liability limited by a scheme approved under Professional Standards Legislation

We acknowledge the traditional custodians of the lands where we live, learn and work
  • Etax Home
  • FAQ
  • New Users Start Here
  • Etax Login
  • Password Help