Work from Home? Make Sure You Claim These Expenses
If you operate a business from your residence — whether as a contractor, sole proprietor, partnership member, or company owner — you're eligible to deduct a portion of your household expenses. Many home-based business owners don't claim everything they're entitled to simply because they're not sure what counts.
What can you claim?
Fully deductible expenses
You can deduct 100% of costs incurred exclusively for business purposes, such as:
- A dedicated business phone line
- Software subscriptions used only for business
- Industry magazine subscriptions
Proportional deductions
For shared household expenses, you can claim the percentage of your home that is dedicated to work activities.
How the calculation works: If your house measures 100 square metres and your office occupies 10 square metres, you may claim 10% of shared household costs like electricity bills, rates, insurance, and internet.
The claimable space can include multiple areas — garages, workshops, offices, and other work zones all contribute toward your total deductible percentage.
Common claimable expenses include:
- Rent or mortgage interest
- Electricity and gas
- Water rates
- Council rates and body corporate fees
- Home and contents insurance
- Cleaning costs (proportional)
- Depreciation on furniture and equipment in your office
IRD guidance
The official guidance is available on the business.govt.nz website, which provides comprehensive information on claiming expenses from home-based operations. IRD's guidance also covers the Square Meter Rate method — a simplified approach that may be easier than calculating actual costs.
Record-keeping requirements
Keep records of all expenses for at least seven years. This includes receipts, invoices, and a note of the floor area calculation you use. If IRD ever queries your claim, clear records make the process straightforward.
Get help from Prosaic
Prosaic automatically reads your bank transactions, identifies claimable home office expenses, and shares them with your accountant — so nothing gets missed. Try it free.