Self-employed claiming home office expenses

Home office expenses are the costs for running a business from a sole trader's home, based on the floor area of the house.

Home office expenses may include power, water, internet, mortgages and rates, or rent.

For example it could be a room set up as an office, a workshop, art studio or for hairdressing, massage or therapy services.

A self-employed person who is renting and uses part of their home for business purposes can claim a proportion of their rent as a mixed-use business expense. A self-employed person who has a mortgage can claim some of their rates, insurance and mortgage interest as business expenses.

When a self-employed person is applying for or getting Accommodation Supplement any home office expenses for the portion of the property used by the business need to be deducted from the accommodation costs being claimed by the client.

This is part of the calculation to determine what a client's weekly qualifying accommodation cost is.

For more information see:

• Weekly qualifying accommodation costs

Lagi rents her home and pays $600 per week. Lagi uses the percentage of home space used for business to calculate her home office expenses.

Lagi uses 8% of the house as a sewing room/home office and claims home office expenses of $2,496 per year ($48 per week) in her accounts.

Lagi applies for Accommodation Supplement. The amount that Lagi claims as a home office expense is deducted from her rent and her weekly qualifying accommodation costs are calculated as $552 per week ($600 - $48).

Weekly qualifying accommodation cost