Home Office Apportionment Calculator NZ 2026/27
This home office apportionment calculator works out the tax deduction you can claim in New Zealand for the part of your home you use for a self-employed business, using the two methods Inland Revenue allows. Enter your home office's floor area and your home's total floor area, and the calculator works out your work-space percentage, the same figure you apply to premises costs such as mortgage interest, rates and rent no matter which method you use for day-to-day running costs. You then have a genuine choice for costs like power, insurance and minor repairs: apportion your actual bills by that same work-space percentage, the actual cost method, or use Inland Revenue's standard square metre rate, currently $57.30 per square metre for the 2026 income year, multiplied by just the area of your office, with no bills to track. Enter your own premises costs, running costs and marginal tax rate, and the calculator shows the deduction and the tax saved under both methods side by side, so you can see which suits your situation before you decide. It updates instantly as you type, with no need to press a button. This is built for the self-employed, sole traders, and businesses working from home, not employees on salary or wages, who are treated differently. General guidance, not tax advice; keep your own records regardless of the method you choose.
Coverage: the square metre rate covers day-to-day running costs only (power, insurance, minor repairs and similar). It does not include mortgage interest, rates or rent, which are apportioned separately by floor-area percentage under both methods.
Actual cost method: apportions all household running costs by your work-space percentage instead of using the standard rate; requires invoices and records to support the claim.
Employees: not covered by these rules; see the FAQ below on Determination EE004 for the separate employer reimbursement option.
Source data: Inland Revenue, Operational Statement OS 19/03 (2026 CPI adjustment) and the Inland Revenue home office expenses guidance. Last verified 26 July 2026.
Premises costs (mortgage interest, rates, rent) are apportioned by your work-space percentage under both methods. Figures are rounded for display and are a planning estimate, not tax advice; keep proper records regardless of the method you choose.
Worked example
Mark is a self-employed graphic designer who works from a 15 square metre office in his 150 square metre home, a 10% work-space share. His mortgage interest and council rates for the year come to $22,000, so his premises deduction is 10% of that, $2,200.00, calculated the same way under either method.
For his running costs, power, contents insurance and minor repairs, Mark has two choices. Under the standard square metre rate, he multiplies $57.30 by his 15 square metre office, giving $859.50, with no bills to track. His actual power and insurance bills for the year total $7,200, so under the actual cost method he would instead claim 10% of that, $720.00.
Adding the premises share to each option, the standard rate gives Mark a total deduction of $3,059.50, while the actual cost method gives $2,920.00, a difference of $139.50 in favour of the standard rate for his numbers. At his 30% tax rate, that is $917.85 of tax saved under the standard rate against $876.00 under the actual cost method. Mark chooses the standard rate, since it is both slightly bigger and means he does not need to keep every power and insurance invoice, only the records for his mortgage interest and rates.
How the square metre rate method works
Inland Revenue sets a square metre rate each year for the dual use of premises, under section DB 18AA of the Income Tax Act 2007. For the 2026 income year, running from 1 April 2025 to 31 March 2026, that rate is $57.30 per square metre. You multiply it by the floor area of the room or space used mainly for your business, not by your work-space percentage, since the rate is already meant to represent the running cost of that space on its own. The rate is based on Stats NZ Household Economic Survey utility-cost data from 2019, adjusted each year for the change in the Consumers Price Index, a 3.1% increase for the year to March 2026 this time. It covers costs like power, gas, and home and contents insurance. It does not cover mortgage interest, rates or rent, known as premises costs, which you still apportion separately by your work-space percentage.
How the actual cost (floor area apportionment) method works
The alternative is to add up your actual household running costs for the year, power, insurance, minor repairs and similar day-to-day costs, and apply your work-space percentage to the total, the same percentage you use for premises costs. Your work-space percentage is simply your home office's floor area divided by your home's total floor area. This method can produce a bigger deduction than the standard rate if your real running costs are high relative to the size of your office, but it means keeping every relevant invoice and being able to show how you calculated the apportionment if Inland Revenue ever asks.
Which method should you use?
You are free to choose whichever method suits you for your running costs, and you do not have to use the same method every year. The square metre rate is usually the simpler option, since it removes the need to track individual power and insurance bills, and it is often a reasonable estimate for an average home. The actual cost method can be worth the extra record-keeping if your real costs are unusually high, for example if you run equipment that increases your power bill well beyond what a typical household uses. Whichever you choose, premises costs, mortgage interest, rates and rent, are always apportioned by your work-space percentage; the square metre rate never applies to those costs.
Employees cannot use this deduction, but reimbursement is different
These square metre rate and floor-area apportionment rules are for self-employed people, sole traders, and businesses using part of a home for the business, not for employees earning salary or wages. An employee cannot personally claim a home office deduction on their own tax return. What an employer can do instead, under Determination EE004, is pay an employee up to $20 a week tax-free for working-from-home costs, plus up to $7 a week for personal telecommunications tools and usage plans, without needing receipts to support it. That is an employer's payroll decision, separate from the calculations on this page.
Record-keeping either way
Whichever method you use for running costs, keep evidence of your home office and total floor areas, such as a floor plan or measurements, and keep the invoices or statements for whatever premises costs you apportion, mortgage interest, rates or rent. Under the square metre rate you do not need to keep every power or insurance bill, which is its main practical advantage, but under the actual cost method you do need those bills to support your claim. A company can only deduct home office costs if it reimburses the shareholder-employee for the business use of their home and keeps accurate records of how and when that reimbursement was calculated and paid.
Who this calculator is for
This calculator is for self-employed people, sole traders, freelancers, contractors, and small business owners in New Zealand who use part of their own home for their business and want to compare the standard square metre rate against the actual cost method before deciding which to use. It assumes a single work space used mainly for business, rather than a room with significant mixed personal and business use throughout the day, which Inland Revenue treats differently. Figures are rounded for display and are a planning estimate; confirm your own numbers against your records and Inland Revenue guidance when you file.
Related calculators
- Working From Home Tax Deduction Calculator: the simpler area-apportionment version of this calculation.
- Home Office Setup Cost Calculator: budget the desk, chair and tech to set up your space.
- Mileage Reimbursement Calculator: claim vehicle costs alongside your home office.
- Tax Reserve Per Invoice Calculator: what to set aside from every invoice for tax, ACC and KiwiSaver.
- Self-Employed Take-Home Calculator: your annual after-tax income once deductions are applied.
- Home Office and Vehicle Expenses: background on this topic.
Official NZ sources
This calculator is built from primary New Zealand sources. Always confirm current figures against the official source for your situation:
- Inland Revenue (IRD): home office expenses overview
- Inland Revenue (IRD): Operational Statement OS 19/03, square metre rate for the dual use of premises
- Inland Revenue (IRD): Determination EE004, working from home and telecommunications reimbursements