Square metre rates

If you use some of your home to run your business, rather than use actual costs you may adopt the square metre rate method to apportion the business use of the home office expenses. The rate is set by Inland Revenue each year based on the average cost of utilities per square metre of housing for the average New Zealand household.

Inland Revenue has recently released the rate for the 2019/2020 income year which has increased from $41.70 in 2018/19 income year to $42.75.

Kilometre rates

The Commissioner announced that the 2019-kilometre rates will continue to be used for the 2020 income year until third party information is received to calculate the allowable expenses for using your vehicle for business purposes. The rate is used to calculate the business-related proportion of costs based on the actual kilometres which the vehicle has travelled for the income year. The rates are:

A flat rate of 79 cents applies to the business portion of the first 14,000 km of total travel.

After 14,000 km, the rates per kilometre for each type of the vehicle are:

  • Petrol or diesel – 30 cents
  • Petrol Hybrid – 19 cents
  • Electric – 9 Cents

Please note that you must maintain a record or a logbook.