Calculating the Claimable Portion
The business space is calculated as a percentage of the house.
First, measure the room or space which is your office (width and length), and if you also utilize the car port or shed as a workshop - only for the business - measure that too, then add the result to the office amount.
You need to come up with the square feet or square meters - here is a calculator for both. Enter your linear measurements into the calculator for the squared result.
Second, the whole house needs to be measured to arrive at the square feet or meters. If you own the property you should be able to find the squared measurement from the title deed documents.
Finally, divide the office+workshop area by the house area to get the percentage that you can claim for the home office...
...use this online percentage calculator :-
will be the total measurement of your home office space, and
B is the total measurement of your
home (excluding the garden please!)
% is the percentage you can multiply against your total bill payments.
Here is a practical example:-
Tom Green Handyman
House measurement = 1200 sq ft
Business area = 300 sq ft (workshop plus office both used solely for the business)
Percentage : 300 / 1200 = 0.25 ........... Home Portion = 25%
If Tom pays $5,000 interest on his mortgage for a year the claimable portion is $5,000 multiplied by 0.25 = $1,250
There may be a threshold on the maximum percentage allowed for claiming home office tax expenses, you will need to check this out with your local tax authorities.