What's the difference in company and sole trader tax return if working from home?

Hi all,

I was just wondering about the treatment about some home expenses. I know that if you work from home you can deduct expenses (gas, electricity, utilities) depending on the use or percentage of area compared to the whole house. What is the best way to calculate the area? 

I'm a company, so does this differ at all to small business or the treatment is the same? 

Also if I enter the home expenses to my personal tax return, is there anything else I need to enter in my company tax return or that should be fine? 

And for laptops, I can write it off immediately if it's under $6500 as a company, but as an individual, I can only write it off if it's $300 or less? Does this mean it's better for me to put it in the company tax return? I'm just a bit confused between what I should put down on my personal return and the company tax return since I am both. 

This is my first company year so feel free to let me know of anything else I should keep in mind. Thanks.

Top voted answer
Apurv Bhalla CPA

Apurv Bhalla CPA, Accountant at Success Tax Professionals

Hi Eric, There are lots of issues here.

  • The area is to be separate from a living area such as it can be separately identifiable as an office used to run your Business. Then if that is a room you may use floor area% age or if room sizes are same Room/All rooms. say 1/3 or 1/4 but that would be an approximation.
  • Your company will be a small business if your annual turnover is < than $2m.
  • Expenses must be allocated as a percentage of your Business, Personal for Income producing activities and Private expenses. Business will be allocated to your company, Personal for income producing activities will form part of you personal tax return. Private portion is what is left non deductible.
  • Laptop bought in company name immediate write off. If bought in personal name, then depreciation if value is > than $300.00
  • Company and you are separate legal entity so please do not mix up the incomes and expenses.If it is PSI then all the profit will be attributed to you.

anything else please feel free to ask....


Eric Phuah

Eric Phuah, Director at

Thank you for your answer Apurv! Really helpful and detailed. I only really have one question after reading your answer: how will I know the difference between a business and a personal expense for income producing activities? For example, I spend all of my working time in my study room, if I find out the percentage of time I use it and the area of the house, I can calculate the percentage I use the electricity for work. But do I put this in the company return as a business expense or on my personal return as a income producing activity?

Apurv Bhalla CPA

Apurv Bhalla CPA, Accountant at Success Tax Professionals

From the sound of it , i believe that your business from company is a PSI- Personal services income.Which means although you are working as a company, the income is yours.So any profit from the business will be attributed to you and will form part of your tax return. in thisa case you may allocate expenses to your company. But please this is a general advise from the facts i have understood,dont rely fully on it., you may still need to consult your tax accountant or otherwise I can help you.

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