How to Claim Phone Expenses in New Zealand (2026 Guide)

Quick answer

New Zealand splits the phone question by who is paying. An employee can’t deduct work costs against salary, so the real question is how much an employer can reimburse tax-free, and Inland Revenue’s Determination EE004 answers it with a set of options that depend on whether the employee works from home and how much of the phone use is for work. A self-employed person simply deducts the business share. This guide covers both, with the GST side and the records. Figures are from Inland Revenue in the Sources section, retrieved 10 October 2026.

Employees who don’t work from home

Where an employee doesn’t work from home but uses their own phone or plan for the job, the employer chooses one of three options ^[1] :

• De minimis: up to $7 a week, or the equivalent for another period such as $14 a fortnight, treated as exempt income and covering all the employee’s costs, including depreciation on a phone they already own ^[1] .
• Principally business use: up to 75% of the employee’s total plan bill ^[1] .
• Principally private use: up to 25% of the plan bill ^[1] .

Under the two percentage options the employer can also reimburse depreciation on the employee’s existing phone at Inland Revenue’s rates ^[1] .

Employees who work from home

For an employee working from home and using their own phone or plan, the options change ^[1] :

• De minimis: up to $27 a week, or $54 a fortnight, recognising the extra household costs, telecommunications costs and depreciation on existing equipment ^[1] .
• Principally business use: up to $20 a week for the home costs, plus up to 75% of the plan bill ^[1] .
• Principally private use: up to $20 a week, plus up to 25% of the plan bill ^[1] .

If the plan cost isn’t regular, a reasonable estimate of the likely spend is acceptable ^[1] .

Evidence and new equipment

EE004 accepts less-than-precise estimates: the employer can rely on evidence such as time spent, or a signed declaration from the employee that the phone will be used principally for work, and a review once every two years is adequate ^[1] . Where an employee buys new equipment to work from home, the employer can treat up to $400 of reimbursement for new telecommunications equipment as exempt income, and a separate $400 for furniture and other equipment; each limit covers all items, not each item ^[1] .

The self-employed

For a home-based business, Inland Revenue lets you choose the business proportion of internet costs as long as it gives a fair and reasonable result ^[2] , and the same approach suits a mixed-use phone plan. A phone used only for the business is deducted in full. For a landline, Inland Revenue allows 50% of the rental where the business shares your private line, and business toll calls are 100% deductible; a separate business line is fully deductible for income tax and GST ^[2] . Assets under the $1,000 low-value threshold are deducted immediately rather than depreciated, using the price less GST if you’re registered ^[3] .

Worked example: a landscaper’s $75 monthly plan is about 60% business by call and data pattern. The deduction is $75 × 12 × 60% = $540 a year, plus 60% of a new $900 handset, which sits under the low-value threshold and is deducted in the year bought.

GST

GST is 15% on most goods and services ^[4] . Claim it on the business share of plans and handsets the business pays for, with taxable supply information over $200 ^[5] . An EE004 reimbursement is a payment to an employee, not a purchase from a supplier, so there’s no GST to claim on it.

Records

Keep the plan bills, the basis for the business share, and for employees on the 75% option, the usage evidence or signed declaration ^[1] . Records generally need to be kept for seven years in New Zealand; the record-keeping guide has the detail.

Common mistakes

• Paying a home-working employee $27 a week and a separate $7 telecommunications amount; the $27 already covers phone costs ^[1] .
• Using the 75% option for a phone that is mainly private, where the limit is 25% ^[1] .
• Claiming GST on employee reimbursements.
• Depreciating a handset that costs under $1,000 instead of deducting it ^[3] .

Software that helps

ExpenseFlow captures phone bills and handset invoices by email, upload or photo, codes each line with a tax code and a written reason, and can apply a fixed business-use percentage you configure for the phone account, so the same share is used every month. It syncs to Xero or QuickBooks Online after approval. It doesn’t calculate EE004 reimbursements or run payroll.