Almost 5 million Australians claimed work from home expenses last financial year, but the ATO has changed the methods you can use to claim tax deductions this tax time. 

"We've got two methods now in which you can claim your working from home expenses," says ATO Assistant Commissioner Tim Loh.

"We've got the actual cost method — you need to be able to portion out the private expense versus the work-related expense [and] that method requires really significant records — and the fixed-rate method."

It comes as a survey of more than 1,000 Australians from Finder finds that one in eight Australians say their tax refund is "critical" to their financial health and that 36 per cent plan to put their return into savings.

The research shows around one in seven Australians (15 per cent) say they will be withdrawing their refund to pay for household bills, while 5 per cent say they will be putting it towards their mortgage.

How the 'actual cost' method works

Here you can claim each expense you have for working from home separately.

But you need to apportion what's private and what's work-related.

You can claim separately for:

• the decline in value of depreciating assets – for example, home office furniture (desk, chair) and furnishings, phones and computers, laptops or similar devices.
• electricity and gas (energy expenses) for heating, cooling and lighting
• home and mobile phone, data and internet expenses
• stationery and computer consumables, such as printer ink and paper
• cleaning your dedicated home office.

The other method that is available is the 67 cents per hour revised fixed rate method.

How the 'fixed rate' method works

The method to claim 67 cents for each hour you work from home doesn't require you to apportion expenses between private and work.

But it also restricts you from claiming each expense item separately. It assumes all your expenses were at that rate and takes in:

• home and mobile internet or data expenses
• mobile and home phone usage expenses
• electricity and gas (energy expenses) for heating, cooling and lighting
• stationery and computer consumables, such as printer ink and paper.

"In prior years, you actually had to have a dedicated workspace in order to use that method, [such as] a home office, whereas now what we're saying is, we know millions of Australians work from the kitchen bench or the dining table or even the couch," Mr Loh says.

"It's really easy to use. [All] you need to do is work out the number of hours you work from home, multiply that by 67 cents per hour. And that's your deduction for your working from home expenses."

Will using the new ATO method result in a lower tax deduction?

Tax agents have previously warned that the 67 cents per hour method could result in a lower tax deduction.