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 used regularly and exclusively 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 them by your office's floor-area % 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 (apportioned by floor-area %)
Landline / mobile annual
General home upkeep (not capital improvements)
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 is intended to cover utilities, rates, insurance, and depreciation on the office portion of your home — but NOT rent or mortgage interest, which you claim separately.
The actual-cost method apportions all your home running costs by the floor-area % of your office. For example: if your office is 10% of your home and your annual home expenses total $35,000 (rent, rates, insurance, power, internet, repairs), the deduction is $3,500. Compare against fixed-rate ($57.30 × 10 m² = $573.00) — actual-cost wins by a wide margin when rent / mortgage interest is high.
Whichever you pick, the space must be used regularly and exclusively for the business. IRD doesn't accept "I sometimes work at the dining table" — there needs to be a dedicated room or partitioned area.
For a fuller walkthrough of eligibility, claimable costs, and recordkeeping, see our guide: Home Office Expenses for Self-Employed Workers in NZ.
Square-metre rate history
IRD re-bases the square-metre rate every year — it's derived from Stats NZ Household Economic Survey utility costs, adjusted annually by the movement in the Consumers Price Index for the twelve months to March. That's why the figure changes each income year rather than staying fixed.
| Tax year | Rate ($/m²) | Source |
|---|---|---|
| 2026-27(current) | $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). 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 | $210.00 | Square-metre |
| Homeowner with mortgage interest 12 m² office in a 120 m² home. Mortgage interest, rates, and insurance apportioned. | $687.60 | $2,860.00 | Actual-cost |
| High-cost home, larger office 15 m² office in a 150 m² home. High mortgage interest and running costs. | $859.50 | $4,610.00 | 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?
Generally no. NZ doesn't have a salaried-employee home office deduction like Canada or the UK. Some narrow exceptions exist for employees on formal WFH agreements where a portion of pay is explicitly allocated to working from home, but most employees can't claim.
Do I need to use a separate room?
A separate room is the cleanest. A partitioned area also works if it's used regularly and exclusively for the business. A shared dining table or living-room corner doesn't qualify — IRD is strict on the 'exclusive use' test.
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 rent or mortgage interest. You can claim the office-portion of those separately on top of the fixed-rate deduction. The actual-cost method bundles them in, so it usually wins for renters and homeowners with significant interest expense.
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 and a floor plan — IRD may request evidence of the apportionment if your return is reviewed.
What square-metre rate applies for 2026-27?
$57.30 per m² for the 2026-27 tax year. IRD publishes an updated rate for each income year — see the rate history table above for the full run of published figures.
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 it's used regularly and exclusively for the rental business. 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 expenses; 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).