Claiming home office expenses

Business, Compliance

If you’re a business owner and you run your business from home, you can claim part of your home expense as a business expense. This includes expenses such as rates, insurance, power and home loan interest.

However, when claiming a home office expense there must be a connection between the use of your home and the business income being generated.

How your home office percentage is calculated is by the floor area set aside for business, compared to the floor area of the whole house. We then use this percentage proportion for your claimable home expenses.

A quick guide to calculate this is

(Home office area divided by Total floor area of home) multiplied by 100

 

For example: If your house is 100m2 and your home office is 12m2

(12 divided by 100) multiplied by 100 = 12%

In this instance your home office percentage would be 12%.

 

Provided you meet the rest of the criteria, here are a few examples of what you would be eligible to claim:

  • 12% of power, gas, and heating
  • 12% of mortgage interest or rent
  • 12% of your home insurance

There is a sheet that WE will provide to help you calculate your home office expense when it’s time to prepare your annual accounts. And as always, if you do need some help, WE are here to help you!

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