Annual Deductible Expenses Calculator NZ 2026
Rates current for the 2026/27 tax year. Reviewed 5 August 2026.
Most sole traders under-claim, and they do it in the same two ways every year. The first is forgetting whole categories, because the expenses that are easiest to overlook are the ones that never generate an invoice addressed to the business: the share of your home you work in, the portion of your phone bill that is work calls, the software renewing quietly on a personal card. The second is claiming nothing for mixed-use items because working out an apportionment feels harder than skipping it, which trades a real deduction for a small amount of arithmetic. This calculator lays out ten categories, applies a business use percentage to each, and totals what you are entitled to claim. It then does the part that decides whether the effort was worth it, which is converting that total into money. A claim is not a refund. If you are GST registered the GST comes back through your return, and what remains reduces your taxable profit, so the income tax saving is the claim multiplied by your marginal rate. Those two reliefs are separate and are shown separately here, because treating them as one is the most common error in a self-prepared return.
Your expenses by category
Enter what you spent for the year including GST, and the share that is business use. Leave a category at zero if it does not apply.
| Category | Spent | Business use | Claimable |
|---|---|---|---|
| Home office | $540.00 | ||
| Vehicle running costs | $3,600.00 | ||
| Phone and internet | $900.00 | ||
| Tools and equipment | $2,400.00 | ||
| Software and subscriptions | $1,200.00 | ||
| Business insurance | $900.00 | ||
| Accounting and professional fees | $1,500.00 | ||
| Training and development | $800.00 | ||
| Materials and supplies | $2,000.00 | ||
| Work travel | $1,200.00 |
What the claim is worth
The categories people forget
Whole classes of legitimate expense go unclaimed every year because nothing arrives addressed to the business. The home office is the largest: a room used regularly and exclusively for work supports an apportionment of rent or mortgage interest, rates, power and insurance by floor area, and it is frequently worth more than every other category combined. Phone and internet are next, because the bill is personal and the work use is real. Then there are the small recurring items, cloud storage, domain renewals, professional memberships, that are individually trivial and collectively significant. Working through a category list once a year finds most of them.
Apportionment is worth doing properly
The difference between claiming nothing for a mixed-use item and claiming a defensible share is real money. A vehicle at 60 percent business use on $6,000 of running costs is a $3,600 claim, worth roughly $1,500 in combined GST and tax relief for someone in the 33 percent band. The reason people skip it is that it seems to require precision, which it does not. It requires a reasonable method, recorded once: floor area for a room, a representative logbook period for a vehicle, an itemised sample for a phone.
Worked example
A GST-registered sole trader with $95,000 of profit before expenses works through the ten categories and finds $21,700.00 of spending. Apportionment removes $6,660.00 as private use, mostly from the home, vehicle and phone, leaving a claim of $15,040.00. The GST portion, $1,961.74, is reclaimed through the GST return, so the income tax deduction is $13,078.26.
That deduction takes profit from $95,000.00 to $81,921.74, and tax from $21,227.50 to $16,911.67, a saving of $4,315.83. The ACC earner levy is charged on the same profit, so the claim saves a further $228.87 of levy. Combined with the GST, total relief is $6,506.44, or 43.26% of the claimable total. The claim spans the 33 percent and 30 percent bands, which is why the effective relief sits between them rather than at either.
How this is calculated
Each category's claimable amount is what you spent multiplied by its business use percentage. The claimable total is the sum across categories. If you are GST registered, the GST portion is taken as three twenty-thirds of that total, which extracts 15 percent GST from a GST-inclusive figure, and the income tax deduction is the remainder; if you are not registered there is no GST claim and the whole claimable total is deductible. Income tax saved is the tax on your profit less the tax on your profit after the deduction, computed rather than taken at a single marginal rate so that a claim spanning brackets is handled correctly. Rates are those in force from 1 April 2025: 10.5% to $15,600, 17.5% to $53,500, 30% to $78,100, 33% to $180,000, and 39% above that.
Related NZ calculators
- Deduction Value Calculator for a single expense
- Home Office Apportionment Calculator for the largest category
- Vehicle Logbook Calculator for a defensible vehicle percentage
- Depreciation Calculator for capital items that cannot be expensed
- Self-Employed Take-Home Calculator for what you keep after all of it
- Claiming Vehicle Expenses Guide