What’s New for Australia’s Work-From-Home and Vehicle Expense Deductions
For the 2024-25 income year, the Australian Taxation Office (ATO) has made several changes that are particularly relevant for remote workers, digital nomads, and anyone who travels for work:
- Work-from-home fixed rate increased to 70 cents per hour. (ato.gov.au)
- Cents per kilometre rate (for work-related car use) is now 88 cents/km. (ato.gov.au)
- For owners of plug-in hybrid electric vehicles (PHEVs), using them to produce income means you can use an electric vehicle home charging rate of 4.2 cents per km from 1 July 2024, if certain conditions are met. (ato.gov.au)
Eligibility Criteria & Important Requirements
To claim the above deductions you must:
- Be an Australian tax resident earning assessable income through remote work or work that requires travel.
- Keep detailed records: hours worked from home, kilometres travelled for work tasks (not commuting).
- For PHEVs: maintain records of electricity expenses and usage relevant to income-earning, avoid use of private charging to inflate claims.
Practical Tips for Digital Nomads & Remote Workers
- Use time-tracking apps or tools to log work hours at home. Even a simple journal can be helpful.
- Photograph receipts and set up a folder (physical or digital) for all relevant bills: electricity, car maintenance, charging sessions.
- If using multiple vehicles or charging methods, allocate actual use for income purposes and don’t overallocate.
- If unsure, consult a tax agent with experience in remote work claims — the distinction between deductible work and private use can be scrutinised.
Example Scenarios
Alex works from Bali for several Australian clients, performing his tasks via laptop. He logs 30 hours/week at home and uses his PHEV to get to co-working spaces and client sites (not daily commutes). For 2024‐25, he claims work-from-home rate for 30 h/week — approximately 70c × hours over the year — plus vehicle expenses using the 88c/km rate for work travel, plus the EV home charging rate for charging time tied to income work.
Sarah, another nomad, owns a PHEV but only uses it occasionally for client meetings, mostly using public transport otherwise. She should only claim the proportion of charging and vehicle expenses relevant to her work-travel, keeping solid logs of each journey.
Watch-Outs & Tips to Avoid Audit Triggers
- Avoid lumping private and work expenses together — that’s a red flag.
- Ensure that use of the vehicle or charging is truly for income-earning activities.
- Keep complete records: time, purpose, costs.
- Be honest about what’s commuting (non-deductible) versus work-travel (deductible).
These rules offer great opportunity for remote workers, but careful record-keeping and understanding limitation thresholds are vital to stay compliant and get maximum benefit.