Claiming Home Office Expenses

Claiming home office expenses

Covid has changed the way we all do business in one way or another. Potentially its greatest impact on our work-life balance was taking everyone out of the office. This meant many bedrooms were turned into a makeshift WFH (work from home) office.

In the past two years, as we have slowly returned to a new normal life, most office-based businesses have realised one important thing:

Most of their staff don’t need to be in the office full time, or in some cases at all, meaning many businesses are giving staff the option to work remotely at least a few days a week.

This has left an important question in the post-pandemic world: Can companies claim home office expenses? Let’s take a look…

Using space in your home as your office

If you are a sole trader, independent contractor or are using your home as your primary office, almost every expense related to your business can be claimed.

The actual space in your home that is used for business can be claimed. If there is space that is strictly used for business, you can claim based on square footage and value of your house.

If your home office isn’t strictly used for business, you will need to consider the portion of time the space is used when claiming.

Claiming utility bills

Utility bills like home phone and internet can also be claimed.

With your home phone, 50% of your landline rental is deductible and the charge on all business related calls is fully deductible.

With your internet, if you have a connection that’s used for both personal and business use, this can be claimed.

You need to decide what portion is for business, and be able to justify this.

Claiming expenses for multiple employees

If you’re a business with multiple employees that work from home on a part or full time basis, you can still claim expenses based on the same criteria as a sole trader.

This is all dependent on whether you are contributing to the employees home office expenses or not.

There are still grey areas…

Even with this information, claiming home office expenses can have some grey areas which become complicated and make it hard for you to know whether you are remaining compliant with the IRD rules.

The best thing you can do is seek proper professional advice. Contact Drumm Nevatt & Associates, we’ll be happy to assist you.