Occupancy expenses

Example: employer provides place of work

Priya currently lives in Albury and is employed as a salesperson for the southern New South Wales region. She is offered a promotion to the area sales manager position for Victoria by her employer. The job is based at her employer's Geelong office but they are flexible so they allow Priya to work from her home in Albury.

As Priya’s employer provides her with an office to work from, she can't claim occupancy expenses. It is Priya's personal choice to live in Albury.

Example: occupancy expenses deductible

Abdul is employed as the on-site manager in a large townhouse complex. As the on-site manager, his duties include being available to deal with issues that arise on-site or that are raised by residents, manage the townhouses in the complex that are rented out by the owners, attend to the gardening, repairs and maintenance issues for the complex and provide monthly reports to the body corporate.

As the onsite manager, Abdul must be available from 9:00 am to 5:00 pm each weekday and from 9 am to noon on weekends. Outside of these times Abdul must be available to attend to emergencies.

He lives on-site and rents a townhouse for discounted rate of $400 per week which has a separate small room at the front set up as an office. The room is 6m² and Abdul's townhouse is 120m². Residents, tradespeople and anyone else coming onto the complex to attend to an issue go to the office to speak to Abdul in the first instance.

The office has a:

• lockable glass sliding door at the front and a lockable door at the back of the office which leads to the rest of his townhouse
• counter installed with a built-in desk, filing cabinets and a photocopier behind the counter
• large sign outside out the front indicating that the on-site manager's office is located there.

Abdul's employer provides a computer, mobile phone and printer for him to use while he is working.

As the office is small and is mainly taken up with a with the built-in counter, desk and other office equipment, Abdul doesn’t use the room for non-work purposes. When he finishes working for the day, he locks the front door of the office and the door leading to the rest of his townhouse.

Abdul can claim a deduction for a portion of his occupancy expenses as a result of working from his home because:

• his income earning activities require him to have a place of business for residents of the complex, tradespeople and other contractors to discuss matters with him and to deal with any issues with arise on-site
• his employer doesn't provide him with an alternative place of business to work from
• it is necessary for him to work from the office set up in his townhouse so that he is onsite when required
• the room he works from is used exclusively for work purposes and it is not readily capable of being used for any other purpose due to the built-in counter, desk and other office equipment.

Abdul's rent expenses for the 2025–26 income year are $20,800 ($400 × 52 weeks).

Abdul calculates his deduction for occupancy expenses as follows:

Total occupancy expenses × floor area percentage

$20,800 × 5% = $1,040.

End of example

Example: occupancy expenses not deductible

Randy’s employer decides to permanently close the office he currently works from before their shutdown in mid-December 2025. From January 2026, Randy works from home in either his lounge room at a desk or at the dining table. As Randy only needs a laptop and a mobile phone, he doesn’t have a room set aside to work from.

Randy can’t claim a deduction for any portion of his occupancy expenses.

Even though his employer hasn’t provided him with a work location and it is necessary for him to work from home, he doesn’t have an area of his home set aside to use exclusively, or almost exclusively, for income producing purposes. His dining room and lounge room are also readily capable of being used, and are used regularly, for private purposes.

Randy also doesn't have an area of his home set aside as a 'place of business'.