Your home office: What expenses can you claim?

Almost everyone has been working from home this year – some of us loved it, some of us hated it. But whether you love the chilled-out pyjama vibe or you’re longing for the bustle of a busy office, it does add a little extra to the power and water bills. 

So, how much can you claim in expenses when you’re working from home?

Home office expenses when you’re an employee

If you worked from home during Lockdown, is your employer required to cover some of your home office costs? Sorry, no. Despite earlier rumours of an Inland Revenue sum of $15 a week for those working from home, there is no obligation for your employer to recompense you for extra power, water, gas or phone costs. 

Your employer can choose to pay you up to $20 a week tax-free for expenses or a one-payment of up to $400 for furniture; that money comes out of their own pockets, not the government’s. 

Home office tax deductions – what can you claim? 

Whether you’re a contractor, sole trader, in a partnership or you own your own business, you can claim expenses for your home office. But the amount you’ll read about on the Inland Revenue website is – perhaps intentionally – much lower than what you might actually be able to claim. 

Inland Revenue provides a simplified per metre calculation rate of $42.75 per square metre for your home office for the 2019-2020 year. The calculations provided by Inland Revenue are extremely conservative and don’t take into account all the ways you might use your home. For example, your garage is excluded on this visual guide. But if you’re a contractor who uses the garage to store work tools and equipment at night, that’s a business use. And the numbers use a dedicated home office as an example, when thousands of Kiwi business owners use the kitchen table as their office. How do you work that out? We can help. 

IR numbers are just a starting point

The number you’ll come up with using the online information is a baseline only – by making sure we fully understand the configuration of your home we could add considerably to that. As a guideline, you may be able to claim between $100 and $300 per month. Give us a call or drop us an email, and we can make sure you’re claiming as much as you’re entitled to. We can provide a new perspective on how you use your home and how your business is positioned as part of your household expenses. 

We always work within the tax laws, making sure our clients get the maximum benefit possible by ensuring we fully understand the way you work from home and then working to maximise their claims – we ask questions, we dig into your accounts, and we aim to minimise the amount of tax you have to pay.