Home Office Expense Calculator
Working from home for a business or side hustle? IRD lets you choose between a fixed per-square-metre rate or apportioning actual home expenses. This calculator runs both methods side-by-side so you can pick the one that gives the bigger deduction.
Floor area set aside and used mainly for work.
Total floor area of your home (including the office).
Used to estimate your tax saving — leave blank to see the deduction only.
Enter your annual home expenses. We'll apportion household costs by your office's floor-area %, apply your own business-use % to internet and IRD's treatment to phone lines, and compare against IRD's square-metre rate. If you skip this, only the fixed-rate method applies.
For homeowners, interest only — not principal repayments
Annual rates bill
Building / contents premium
Annual electricity + gas
Full annual bill for the plan
IRD sets no percentage: use a method that gives a fair and reasonable result, and keep a record of it. Left blank, no internet is counted.
Annual rental. IRD allows 50%, not the floor-area share
Annual cost. Claimed in full. Mobile plans are not covered here: claim only the business-use share separately
General home upkeep (not capital improvements)
Recommended deduction (IRD fixed rate)
$687.60
Your home office occupies 12.0% of your home (12 m² of 100 m²).
12 m² × $57.30/m² + your share of mortgage interest/rates
$687.60
IRD's pre-set rate covers utilities, insurance and depreciation — no receipts needed for those. It does NOT include mortgage interest, rates or rent, so this total adds your office's share of those on top, per IRD's own formula.
12.0% floor-area share of your household costs, internet at your business-use % (a shared landline at IRD's 50% share, a separate business line in full)
$0.00
Larger deduction when rent / mortgage / utilities are high relative to office size. Requires receipts and documented apportionment — IRD may request evidence.
Eligibility: the square-metre rate needs an area set aside and used mainly for the business. A shared space can only claim actual costs, apportioned by the space and the time used for business.
Employees can't claim this: expenses incurred in earning salary or wages aren't deductible. An employer can pay a fair, tax-exempt reimbursement instead. Self-employed people, sole traders, partnerships and rental investors are the typical claimants.
Square-metre rate 57.30 per m² for 2025-26 — IRD updates this rate annually via Determination.
Square-metre rate vs actual cost
IRD's square-metre rate (Income Tax Act 2007 s DB 18AA) is a published $/m² figure updated annually. For 2025-26 it's $57.30/m², up from $55.60/m² the year before. The rate stands in for the other running costs of the office area. It does not include mortgage interest, rates or rent: s DB 18AA(2)-(3) adds the office share of those on top (business m² ÷ total building m² × total premise costs), and no other home costs can be claimed.
The actual-cost method apportions household costs such as rates, insurance, power and mortgage interest by the floor-area % of your office. Internet on a plan you also use privately is different: you work out a business proportion that gives a fair and reasonable result, and IRD sets no percentage. For example: a 10 m² office in a 100 m² home (10%), with $35,000 of annual home costs ($26,000 mortgage interest, $3,500 rates, $2,000 insurance, $2,400 power, $1,100 internet, of which this example assumes 60% is business use), gives an actual-cost deduction of $4,050.00. The square-metre rate gives $573.00 (10 m² × $57.30) plus $2,950.00 (the office share of the $29,500 interest and rates) = $3,523.00, so the actual-cost method gives the larger claim here.
The square-metre rate option needs an area that is set aside and used mainly for the business. Without one, IRD has you apportion actual household costs by both the space and the time that part of the home is used for income-earning activities, so occasional work at the dining table earns only a small claim.
For a fuller walkthrough of eligibility, claimable costs, and recordkeeping, see our guide: Home Office Expenses for Self-Employed Workers in NZ.
Square-metre rate history
IRD re-bases the square-metre rate every year — it's derived from Stats NZ Household Economic Survey utility costs, adjusted annually by the movement in the Consumers Price Index for the twelve months to March. That's why the figure changes each income year rather than staying fixed.
| Tax year | Rate ($/m²) | Source |
|---|---|---|
| 2026-27(current — provisional, carried forward pending IRD's 2026-27 determination) | $57.30 | IRD source |
| 2025-26(filing year) | $57.30 | IRD source |
| 2024-25 | $55.60 | IRD source |
| 2023-24 | $53.10 | IRD source |
| 2022-23 | $51.05 | IRD source |
Worked examples: which method wins?
Three common scenarios, both methods calculated at the 2025-26 square-metre rate ($57.30/m²). Internet is included at an assumed 60% business use, an illustration only because IRD sets no percentage. Actual figures will differ based on your real expenses — use the calculator above for your own numbers.
| Scenario | Square-metre method | Actual-cost method | Winner |
|---|---|---|---|
| Small office, flatting/renting 6 m² office in an 80 m² home. Modest utility-only claim (no rent apportioned). | $343.80 | $905.00 | Actual-cost |
| Homeowner with mortgage interest 12 m² office in a 120 m² home. Mortgage interest, rates, and insurance apportioned. | $687.60 | $3,700.00 | Actual-cost |
| High-cost home, larger office 15 m² office in a 150 m² home. High mortgage interest and running costs. | $859.50 | $5,540.00 | Actual-cost |
Pattern: fixed-rate tends to win for renters and small offices with modest apportionable costs (no big rent or mortgage-interest claim behind it). Actual-cost tends to win once mortgage interest, rates, and insurance are added to the mix — which is most owner-occupiers.
Frequently asked questions
Can I claim home office expenses as a PAYE employee?
No. The Income Tax Act denies a deduction for expenditure incurred in deriving income from employment (s DA 2(4), the employment limitation), so salary and wage earners can't claim home office costs. Your employer can instead pay you a fair reimbursement for using your home, which IRD treats as exempt income.
Do I need to use a separate room?
Not for the square-metre rate option: IRD allows it only if the business area is set aside and used mainly for business. A separate room or partitioned area is the clean case. If your workspace is shared (a dining table, a living-room corner), you can still claim actual costs, but you apportion them by both the space and the time that part of the home is used for income-earning activities.
Can I claim both methods to maximise the deduction?
No — you pick ONE method per year. You can switch between years if your circumstances change (e.g., move house, change office size), but not within a single tax year.
What about rent and mortgage interest under the fixed-rate method?
The square-metre rate doesn't include mortgage interest, rates or rent. Under Income Tax Act 2007 s DB 18AA you add the office share of those three on top of the area × rate amount, and you can claim no other costs for the home. The actual-cost method instead apportions your actual household costs, such as power and insurance, by the area used for business, and claims internet at a business proportion that gives a fair and reasonable result.
Will IRD ask for proof?
For the fixed-rate method, IRD only needs your office area and total home area. For actual-cost, keep receipts, a floor plan and a note of how you worked out your internet share — IRD may request evidence of the apportionment if your return is reviewed.
What square-metre rate applies for 2026-27?
IRD hasn't published a rate specifically for 2026-27 yet — it typically publishes each income year's rate only after that year ends (expected mid-2027). Until then, use the last confirmed published rate of $57.30 per m² (from the 2025-26 income year) as your planning estimate — see the rate history table above for the full run of published figures, and check back once IRD releases the official 2026-27 determination.
Can I claim home office if I'm a rental property investor?
Yes. If you manage your rental portfolio from a dedicated home office — bookkeeping, tenant liaison, property inspections admin — you can apply the same square-metre or actual-cost method to that space, provided the area is set aside and used mainly for the rental business (otherwise apportion actual costs by space and time). Keep it separate from any self-employment or sole-trader home office claim if you have both.
How do I calculate my office floor-area percentage?
Measure your dedicated office area in square metres, then measure the total floor area of your home (including the office). Divide office by total — e.g. 12 m² office in a 120 m² home is 10%. That percentage is what you apply to actual-cost household expenses such as rates, insurance, power and mortgage interest (internet and phone lines are worked out separately); the square-metre method skips this step and multiplies office area directly by the published rate.
Does the square-metre rate change each year?
Yes. IRD re-bases the rate every income year from Stats NZ Household Economic Survey utility-cost data, adjusted by CPI movement to March. It has risen most years — always use the rate for the specific tax year you're claiming, not last year's figure.
Related calculators
Sources
Square-metre rate from IRD — Using your home for your business. Historical rates from IRD's annual news releases and Operational Statement OS 19/03 CPI adjustments (linked in the rate history table above).