Working From Home Tax Deduction Calculator NZ

This calculator estimates the tax deduction you can claim for working from home in New Zealand by apportioning your household costs to the area you use for work, and shows the tax that saves you at your marginal rate. If you are self-employed or run a business from home, the part of your home given over to work earns you a deduction against your income, because a share of the costs of running the house, the power, rates, insurance, and mortgage interest or rent, relates to earning that income. The most common method is to work out the floor area of your work space as a percentage of your home's total floor area, then apply that percentage to your apportionable household costs for the year. You enter the area of your home office, your home's total floor area, your annual household costs and your marginal tax rate, and the calculator works out your work-space percentage, the deductible amount, and the tax it saves. Use it to estimate your claim and to see that even a modest home office adds up over a year. Phone and internet used for work can usually be claimed separately on a reasonable basis, and IRD also offers a square-metre rate method that some find simpler. Keep good records either way. General information, not tax advice.

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$
$660
tax saved by the home office deduction
Work-space share10%
Deductible amount$2,000

Apportionment method on shared household costs; claim work phone and internet separately. IRD also offers a square-metre rate method. Keep records. General information only.

How it works

The work-space share is your home office area divided by your home's total floor area. The deductible amount is your annual household costs times that share. The tax saved is the deductible amount times your marginal tax rate, since the deduction reduces your taxable income.

Worked example

A 12 square metre office in a 120 square metre home is a 10 percent work-space share. Applying that to 20,000 dollars of household costs gives a 2,000 dollar deduction, which at a 33 percent rate saves about 660 dollars of tax.

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Frequently asked questions

Can I claim a tax deduction for working from home?

If you are self-employed or run a business from home, you can claim a share of household costs that relate to the space you use for work, such as power, rates, insurance, and mortgage interest or rent, based on the area used.

How is the home office deduction worked out?

You divide the floor area of your work space by the total floor area of your home to get a percentage, then apply that percentage to your apportionable household costs. Phone and internet used for work can be claimed separately on a reasonable basis.

Does IRD have a simpler method?

Yes, IRD publishes a square-metre rate option that combines a set rate per square metre with the premises cost portion, which can be simpler than tracking every bill. This tool uses the area-apportionment method. Keep records either way.