14 September 2022
If you’re a sole trader or in a partnership, you may be able to claim the business-use portion of running expenses (the costs incurred using your home’s facilities) and occupancy expenses (what you pay to own or rent your home).
For example, Georgia is a sole trader and runs a hairdressing business from her granny flat. She keeps detailed, accurate and complete records – including all hours she has run her business from home, depreciating assets and equipment and how she works out business versus personal use. This means she has a few methods to choose from to calculate running expenses she can claim for the 2021–22 financial year. These are the:
As Georgia’s home salon has the character of a place of business, she also calculates occupancy expenses, including mortgage interest, council rates and house insurance premiums, based on the proportion of the floor area and time it was used for business.
If your business is a company or a trust and you run part or all of your business from home, you should have a genuine, market-rate rental contract (or similar agreement) with the owner of the property. This will determine which expenses you pay for and can claim as a deduction.
Find out more about claiming home-based business expenses in our web content, which includes a handy fact sheet. Remember, registered tax agents can help you with your tax.
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Use the ATO app to access and manage your tax and super on the go.
Useful links and fact sheets on common expenses to help make tax time easier.
Here’s an overview of different types of expenses.