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Home Office Calculations

November 2, 2018

If you work from home, you are no doubt aware that you may claim a deduction for the business use of your home.

To date this claim has been based on an apportionment of the actual costs incurred each year for utilities (gas, electricity, water, etc).This has meant you needed to maintain and retain detailed records of these costs.

This method is still available. However, you may now choose to use a standard square metre rate set by the Inland Revenue.

Costs that relate to the premises are still based on an apportionment of actual costs (rent, mortgage interest, rates).

If you choose to adopt the standard square metre rate the calculation for your home office claim is two step.

Example

  • Your home is 200sq m
  • You use 20sqm for your business.
  • Standard square metre claim20x$14.10 (the current standard rate)
  • Plus 20/200 x mortgage interest/rent and rates.

If you have any questions about the best way to calculate your Home Office deduction, please contact your accountant.