What can New Zealand businesses claim as expenses?

Online advertising, print, radio, outdoor, SEO, and content marketing are fully deductible when incurred for business promotion. GST-registered businesses purchasing digital advertising from offshore platforms must account for reverse-charge GST at 15% — but also claim it back, resulting in no net cost.

Insurance premiums protecting business assets, income, and liabilities are fully deductible. This includes public liability, professional indemnity, property and contents, employer liability, and business interruption insurance. Key-person life insurance is deductible only if the policy proceeds would be assessable income on payout.

Business travel costs are deductible for the business portion. Domestic and international flights, accommodation, and transport are deductible when travel is wholly for business. Mixed business and personal travel requires apportionment between deductible business days and non-deductible personal days.

Assets costing NZD 1,000 (GST-exclusive) or less are immediately expensed in the year of purchase. Assets over NZD 1,000 are capitalised and depreciated at IRD-prescribed rates using either the diminishing value or straight-line method.

Home office expenses are partially deductible based on floor area and time used exclusively for business. IRD uses the floor-area method: business proportion = (office sqm / total home sqm) x (business days / total days).

Most business meals and entertainment are 50% deductible under the Income Tax Act 2007. Exceptions allow 100% deduction for meals consumed on business premises by staff working late, working lunches for employees on the employer's premises, and food and drink at overseas conferences attended solely by employees.

Motor vehicle costs are deductible for the business-use portion only. Sole traders can use the IRD mileage rate (NZD 1.04/km for the first 14,000 km in 2025/26) or actual costs apportioned by a 3-month logbook. Company vehicles used privately trigger FBT.

Rent paid for business premises — offices, warehouses, retail space, co-working desks — is fully deductible in the year it is incurred. Lease incentives received from the landlord must be spread over the lease term and included in income.

Accounting, legal, consulting, and specialist fees are fully deductible when incurred for revenue (income-earning) purposes. Fees for capital transactions such as acquisitions or company restructuring must be capitalised, not expensed.

Wages, salaries, bonuses, and employer KiwiSaver contributions paid to employees are fully deductible. The deduction is available in the year the wages are incurred, not necessarily when paid.