Home office tax deduction and expense claim calculator
Claim what you're entitled to
Running a business from home means a portion of your household costs may be claimable as a business expense. A portion of your mortgage interest, council rates, power, and insurance can all be claimed as business expenses, provided you get the calculation right.
That means working out your floor area percentage, applying the IRD’s square metre rate, and handling GST correctly if you’re registered. This calculator pulls those pieces together and gives you an estimate based on the latest IRD rates.
How your claim is calculated
Understanding what’s behind the numbers will help you enter the right inputs and trust the result you get.
Floor area and business use percentage.
The calculator asks for your total home area and the area used for your dedicated office, both in square metres. It divides one by the other to work out your business-use percentage, which drives how much of your fixed costs you can claim. Only the area used primarily for work counts, so a shared living room generally wouldn't qualify.
The IRD square metre rate.
The IRD publishes a per-square-metre rate (currently $55.60 for 2024–2025) that covers utilities like power, gas, and home insurance. The calculator multiplies this rate by your office area to produce your utility and insurance deduction. Because these costs are covered by the rate, you don't need to track them individually.
Fixed costs: mortgage interest, rent, and rates.
On top of the square metre rate, you can claim the business-use portion of your annual mortgage interest (or rent) and council rates. Enter these in the relevant fields. One important detail: if you own your home, only the interest portion of your mortgage payments can generally be claimed, not the principal repayments. The calculator apportions these costs using your business-use percentage.
The GST adjustment.
If you're GST-registered, toggle ‘Yes’. The calculator will extract the GST component from your council rates (using the 3/23 fraction) so you can claim it separately in your GST return without double-counting in your income tax deduction. If you're not GST-registered, toggle ‘No’ and this step is skipped.
See how the deduction breaks down
A marketing consultant works from a 40m² office in a 120m² home. Their annual mortgage interest is $50,000, council rates are $4,000, and they’re GST-registered. Their business-use percentage is roughly 33%.
With mortgage interest included
| Utility and insurance deduction | (40m² × $55.60): $2,224 |
| Fixed cost deduction | (($50,000 + $4,000) × 33%): $18,000 |
| Total home office claim | $20,224 |
| GST extracted from rates | ($4,000 × 33% × 3/23): $173.91 |
| Net home office deduction | $20,050.09 |
Without mortgage interest (rates only)
| Utility and insurance deduction | $2,224 |
| Fixed cost deduction | ($4,000 × 33%): $1,333 |
| GST extracted from rates | $173.91 |
| Net home office deduction | $3,383 |
One more thing to keep in mind
The IRD’s kilometre rates change periodically, and different vehicle types carry different rates. This calculator uses the latest published rates, but it’s worth checking the IRD website if you’re filing for a previous tax year.
Want the full picture?
Our Ultimate guide to claiming work-related vehicle expenses covers how these rules apply across different business structures and vehicle types.
Tax time putting pressure on cash flow?
A solid claim reduces your tax bill, but tax season can still hit at the worst time for cash flow. If you need to bridge a gap, we can help with fast, flexible funding built for small businesses.
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FAQs
Common questions answered
Generally, no. You typically only need to maintain one for a continuous 90-day period. That logbook then establishes your business-use percentage for up to three years, provided your driving habits stay broadly the same.
Driving between job sites, heading to client meetings, and picking up supplies all count. Your daily commute to a regular place of work generally doesn’t, even if you’re self-employed.
- If your employer already reimburses you at or above the IRD rates, there’s generally nothing further to claim. If they reimburse at a lower rate, you may be able to claim the shortfall. This is one where a conversation with your tax agent is worth having.
