The Australian Taxation Office (ATO) has clear rules around what you can and what you can’t claim. So, what is considered ‘eligible’ as a tax deduction? The short answer, as stated by the ATO, is that you could claim deductions for costs that relate to your work. If you work from home, you could make claims for the work-related part of your costs of internet service and any devices or equipment, like a PC, laptop, tablet, or modem.

Need help with how tax deductions work?  

Tax deductions are work-related expenses that may lower your taxable income. Any expenses you intend to claim for tax, should be logged in a record of the time used for work-related activity. Any costs for internet, equipment or subscriptions that are for personal use are not eligible to claim. 

We’ve put together some helpful tips around claiming your home internet as a tax deduction. Remember, you should chat to a professional, like a registered tax agent or accountant, to get the right advice for your personal situation.

1. What home internet costs could I claim? 

You could make deductions for the work-related use of your home internet. These could include:

• Internet expenses for time spent working from home
• Equipment like modems or Wi-Fi boosters used for work time 
• Subscriptions and streaming services used for work-related content

Quick tip: Only the work-related portion counts. Keep a record of time used for work.

2. How do I calculate my home internet usage for work?

The Australian Taxation Office recommends using a log of time you use for work over a typical 4-week period to calculate your claim. This means logging your usage over 4 weeks and multiplying it by 12 to estimate your annual work-related usage percentage.  

Calculation example: If your internet plan costs run at $80 per month and you use it 25% of the time for work, you could claim $20 per month. This means $240 over 12 months. If your usage varies at different times throughout the year, keep a detailed log to show how it varies.    

3. Can I claim my modem or other home internet equipment?

Any internet costs that are work-related could be considered for a deduction. Claiming a percentage of your modem of your Wi-Fi booster costs on your tax return depends on usage and how much the device costs.

 Example:  

• If the device costs under $300, you may be able to claim it as a deduction on your next tax return. 
• If your device costs are over $300, you’ll need to claim it like your internet bill, as a percentage of the time it’s used for work. 

Quick tip: Don’t forget to keep all your receipts and records for your internet expenses.   

4. Can I claim any expenses on my subscriptions? 

You may also be able to claim access to pay TV or streaming services in limited circumstances if you use them for work. If the service is work-related, you could claim deductions for any content that is connected to your work.

Example: If your work requires you to stay up to date with sporting results and news, you may be able to claim a percentage of a cost related to a sports app subscription. Any use must be calculated for work-related use.

5. What internet expenses can’t I claim?  

For you to claim any expenses for home internet usage, you’ll need to follow the ATO’s guidelines . To stay within the rules for your tax return, here’s what you can’t include:

• Any personal home internet usage
• Any costs paid or reimbursed by your employer  
• Internet equipment supplied by your employer 
• One-off setup or installation fees 

6. What records do I need to keep?

Here’s some of the things you may need to provide to your accountant or directly to the ATO when making your tax return.

• A 4-week log showing your work-related usage 
• Internet bills that reflect your usage patterns 
• Proof of purchase for your internet devices (if claiming modem or Wi-Fi booster device costs) 

Quick tip: Keep your records for at least five years, the ATO may ask to see them. 

7. Is EOFY a good time to upgrade my internet?

If you’re considering upgrading your home internet, doing it before June 30th could mean a tax time claim. This way you have your new internet costs ready for your tax return.

Choosing the right internet plan for you.

Getting the best home internet plan for your home depends on several factors. In general, the faster the download and upload speed determines the price of the monthly plan. Plan speed relates to the estimated typical evening speed, which is considered the busiest or prime time for usage on the network.

Vodafone is one of Australia’s leading internet service providers . You can hook your home up to fast and reliable internet via several different plans from Vodafone. Depending on your address, you can connect with nbn®, 4G and 5G   wireless, Vision fibre or mobile broadband. See what service is available at your home. 

Quick tip: Your home internet is only a tax deduction if used for work. Only the work-related portion may be eligible for claims.

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Disclaimer: This is not professional tax advice, and you should always consult a registered tax agent for professional advice related to your taxable income, tax deductions and tax returns. All information and claims presented have been taken from the ATO website.