Self-Employed Expenses in NZ: What You Can Claim and Keep

Short answer: If you are self-employed in NZ, you can deduct an expense to the extent you incurred it in earning your business income, apportioned wherever there is private use. The usual claims are home office, vehicle, phone, tools, software, insurance and professional fees. Home office is claimed at Inland Revenue’s square metre rate of $57.30 for the 2026 tax year, plus a floor-area share of rent, rates and mortgage interest. Photographs and scans of receipts are accepted, and every record must be kept for at least 7 years.

New Zealand’s tax year runs 1 April to 31 March, and Inland Revenue names each year by the date it ends, so the “2026 tax year” means 1 April 2025 to 31 March 2026. Every rule and figure below comes from Inland Revenue and assumes a sole trader with a standard 31 March balance date. For the surrounding picture — rates, GST and deadlines — see self-employed taxes in NZ, and for the return these numbers eventually land on, the IR3 explained.

What is the test for claiming an expense as a business cost in NZ?

There is one general rule, and it is narrower than most people assume. You may deduct expenditure to the extent to which it is incurred in deriving your assessable income, or in the course of carrying on a business for that purpose. That phrase — to the extent to which — is the whole apportionment regime in five words. An expense does not have to be wholly business to be claimable, and it does not become wholly claimable because part of it was.

Two limitations sit on top:

• The private limitation. Anything of a private or domestic nature is out, and mixed items must be split on a basis you can explain.
• The capital limitation. Something that keeps giving you value beyond this year is not an expense — it is an asset, and you claim depreciation instead.

Inland Revenue does not ask you to file the workings, but it can ask for them later.

What expenses can I claim as a self-employed person in New Zealand?

The categories below cover almost every claim a freelancer, contractor or trade will make.

Category	What you claim	The catch
Home office	Square metre rate plus a floor-area share of rent, rates and mortgage interest	The area must be set aside and used mainly for business
Vehicle	Kilometre rates, a logbook percentage, or actual costs	One method for as long as you own the vehicle
Phone and internet	The business proportion of the bill	You need a defensible basis for the split
Tools and equipment	Low-value assets outright; above the threshold, depreciation	Investment Boost may add 20% upfront on qualifying new assets
Software and subscriptions	Business-use portion of the fee	Personal streaming and the like are private
Insurance and professional fees	Business cover, accountant, legal advice	Life and personal health cover are private
Interest and bank fees	Interest on money borrowed for the business	Only the business share of a mixed loan
Materials and stock	Direct costs of what you sell or install	Timing rules apply to unsold stock

If you are GST registered, claim income tax deductions on the GST-exclusive amount. The GST itself comes back through your GST return, so including it in your expense figure claims the same money twice.

How do I work out my home office claim?

This is the claim most self-employed New Zealanders get wrong, usually by leaving money on the table. Inland Revenue’s square metre rate method splits the claim in two: the rate itself covers the running costs of the space, such as power and gas, while rent, rates and mortgage interest are claimed separately as a percentage of floor area. The formula is (a × b) + (c × d), where a is total mortgage interest, rates and rent for the year, b is the business area divided by the total floor area, c is the square metres used mainly for business, and d is the annual rate.

Income year	Square metre rate
2026 tax year (1 Apr 2025 – 31 Mar 2026)	$57.30
2025 tax year (1 Apr 2024 – 31 Mar 2025)	$55.60

The rate is adjusted each year for the Consumers Price Index and published after the year ends, so check Inland Revenue’s home office expenses page for the current figure before filing rather than reusing last year’s. No rate has been published yet for the 2027 tax year.

A worked example. A 12 m² office in a 120 m² rented home, with $28,000 of rent paid across the year:

• Premises share: 12 ÷ 120 = 10% of $28,000 = $2,800
• Square metre component: 12 × $57.30 = $687.60
• Total home office deduction: $3,487.60

Measure the room once and keep the measurement. If you take the square metre rate, you cannot then claim the individual utility bills or depreciation on the same space as well.

Can I claim my car, and how does that work?

Vehicles have their own regime. Under the kilometre rate method, Inland Revenue’s Tier One rates for the 2026 tax year are $1.20/km for petrol, $1.30/km for diesel, 90c/km for petrol hybrid and $1.22/km for electric. Beyond 14,000 km the lower Tier Two rates apply — 37c, 38c, 24c and 23c per kilometre respectively — because they cover running costs only. Rates are reset each year, so check the figure for the year you are filing.

The trap is that cut-off: it counts total travel by the vehicle, business and private combined, not just your business kilometres. The Tier One rate also already includes depreciation and other fixed ownership costs, so you cannot claim depreciation on that vehicle separately. NZ kilometre rates and vehicle expenses works through the logbook and actual-cost alternatives.

What can I not claim, and what is only half deductible?

Cost	Treatment
Private and domestic expenses	Not deductible
Travel between home and a fixed workplace	Private, not deductible
Fines and penalties, including tax penalties	Not deductible
Income tax itself	Not deductible
Assets lasting beyond the year	Capital — depreciate rather than expense
Entertainment with a significant private element	50% deductible

The entertainment rule is fixed rather than proportional. Corporate boxes, business use of a holiday home, employee social functions, hired boats with food and drink, and gifts of food or drink are 50% deductible regardless of how private or business-like the occasion actually was. Meals bought while travelling on business sit in a different category and are fully deductible, as is food and drink provided at a conference or training course lasting at least four hours. Inland Revenue’s entertainment expenses page lists both sides.

On the capital side, an asset that falls under Inland Revenue’s low-value asset threshold of $1,000 can generally be written off in full in the year you buy it rather than depreciated. If a purchase lands right on the threshold, check the treatment on claiming depreciation before you file. Above the threshold you depreciate — though since 22 May 2025, Investment Boost lets you deduct 20% of the cost upfront, with the remaining 80% depreciating as normal. It applies to assets that are new or new to New Zealand; second-hand assets sourced in New Zealand, residential rental buildings and most fixed-life intangibles such as patents are excluded.

Do I need a receipt for every expense?

You need a record for every expense. Needing a document from the seller is a separate question, and it turns on GST. Since 1 April 2023 the legal term is taxable supply information, not “tax invoice”, and the required detail scales with the value of the supply.

Supply value	What is required
$200 or less	Nothing has to be handed over on request, but both sides keep records showing the seller, the date, what was supplied and the amount
Over $200 up to $1,000	Taxable supply information with the prescribed details, including the seller’s GST number and the GST treatment
Over $1,000	The above, plus information identifying the buyer

For supplies over $200, taxable supply information must be provided to a GST-registered buyer within 28 days of a request, or by another date the parties agree. Plenty of suppliers still call it a tax invoice — the substance is the same. Invoicing as a contractor in New Zealand covers what your own bills need to show, and invoice versus receipt explains why the two documents do different jobs.

For an eftpos slip with no detail on it, note what the purchase was for at the time. A bank statement line saying “Bunnings $214.60” proves money left; it does not prove the money was spent on business.

Does a photo of a receipt count as a record in New Zealand?

Yes. Inland Revenue’s position, set out in Standard Practice Statement SPS 21/02, is that paper records transferred to electronic form must be copied completely and accurately, and the electronic copy must be readily accessible and able to be retrieved as legible hard copy or supplied in a form Inland Revenue staff can read. Where that standard is met, the statement accepts that the source-paper document may then be destroyed — which matters, because thermal till receipts fade to blank well inside the retention period.

Two conditions travel with electronic records:

• Language. Records must be in English or te reo Māori unless Inland Revenue approves another language.
• Location. Records must be held in New Zealand unless the Commissioner approves otherwise, so storing them offshore — including in cloud services hosted overseas — needs approval of either you or your provider. Inland Revenue publishes a list of authorised third-party providers on its Tax Technical site. Records held on a device you keep in New Zealand do not raise the question.

How long do I have to keep receipts and records?

At least 7 years, including electronic records, and the obligation continues even if you stop trading. SPS 21/02 puts the period at 7 years, unless the Commissioner extends it to 10 years for specific situations.

The scope is wider than receipts alone: sales and purchases in cash and electronic form, income and expenses, banking records, taxable supply information, wage records, and records of assets and liabilities. Computerised records have to be retrievable and readable at all times — an export in a format nothing can open is not a record. Inland Revenue’s record keeping pages, which include a record keeping checklist, are the reference.

Where does Keel fit into this?

Seven years is a long time to be responsible for a shoebox. The work is not hard, but it is relentless, and it happens at the least convenient moments — a receipt handed over in a carpark, a trip logged between jobs.

Keel: Invoice Maker & Receipts, by Ilura Technology OÜ, is built for exactly that and nothing more. It runs entirely on your iPhone: no account, no sign-in, no bank connection, no cloud sync. Its App Store privacy label reads “Data Not Collected”, and because nothing leaves the device, the offshore storage question above does not arise.

The honest tradeoff is that nothing imports itself. There is no bank feed quietly reconciling last week — you create the invoice, you photograph the receipt (Apple Intelligence reads the merchant, total, tax and date on device), you log the trip. In return the records stay in your hands, the ledger is append-only and hash-chained, and at year end the Accountant Pack exports the whole year as a CSV plus a one-page summary PDF.

The free tier includes unlimited invoices, receipts and mileage, with a “Made with Keel” footer on invoices. Keel Pro is a one-time $249.99 Lifetime purchase, not a subscription. Keel: Invoice Maker & Receipts on the App Store.

Frequently asked questions

What expenses can I claim as a self-employed person in New Zealand? Any cost incurred in earning your business income, apportioned where there is private use. The common claims are home office, vehicle, phone and internet, tools, software, business insurance, accountancy fees, interest on business borrowing, and materials. Private costs, fines and capital purchases are excluded, though assets under Inland Revenue’s low-value threshold of $1,000 can usually be written off immediately.

How much can I claim for a home office in NZ? Two components. The square metre rate is $57.30 per square metre for the 2026 tax year, applied to the area used mainly for business. On top of that you claim rent, rates and mortgage interest at the percentage your business area represents of your total floor area. A 12 m² office in a 120 m² home means 10% of those premises costs plus $687.60.

Does Inland Revenue accept photos of receipts? Yes. Under SPS 21/02, paper records may be copied to electronic form if the copy is complete and accurate and can be retrieved as legible hard copy, and the source-paper document may then be destroyed. Records must be in English or te reo Māori, must be held in New Zealand unless the Commissioner approves otherwise, and offshore or overseas cloud storage needs approval of you or the provider.

How long do I have to keep business records in New Zealand? At least 7 years, electronic records included, and the clock keeps running after you stop trading. SPS 21/02 notes the Commissioner can extend that to 10 years in specific situations. The requirement covers sales and purchases, income and expenses, banking, taxable supply information, wage records, and asset and liability records.

Do I need a receipt for purchases under $200 in NZ? A GST-registered seller does not have to hand over taxable supply information on request for a supply of $200 or less, but both sides must still keep a record showing the seller, the date, what was supplied and the amount. Above $200 the prescribed details are required, and above $1,000 the information must also identify the buyer. Note what an undetailed eftpos slip was for at the time.

Can I claim expenses if I am not registered for GST? Yes. Income tax deductions and GST are separate systems. An unregistered sole trader claims the full GST-inclusive cost as an income tax deduction, because that is the real amount paid. A GST-registered business claims the GST-exclusive amount for income tax and recovers the GST through its GST return instead.

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This article is general information, not tax advice. Consult a qualified New Zealand tax professional.