Understand Deductions

What is a home office deduction

deduction home office

What is a home office deduction?

The deduction for home office is a relatively rare deduction. Although it's been very present in the media during Corona, the rules are very restrictive. For example, just a temporary desk in the living room or a children's room during Corona is not enough. But exactly what it takes to get the deduction, we will go through in this article. And then we go through an example that SKAT has approved.

The deduction belongs to the work-related expensesgroup of deductions, which we have also written a post on here. So if you want to get the full picture of work expenses you can get deductions for, then it's worth giving a look.

In this article, we will cover:
  • What the deduction for home office is
  • An approved example by SKAT
  • Other conditions you will need to be aware of
  • Whether you are eligible to receive any deductions

What is a home office deduction?

The deduction for home office has been much debated especially during Corona, where up to 40% of the population worked from home. However, the rules are very strict and have not been updated for a long time, whereby they are not adapted to the new norm of working from home to a much greater extent.

The main elements of SKAT's assessment are the following three.
  1. First of all, it must be a permanent setup. This means that it can't just be a desk you set up only during Corona.
  2. Next, the room must be arranged so that it CAN'T be used privately. That is, it doesn't matter if you actually use the room privately because it has to be arranged so that it can't be used for anything other than work.
  3. In addition, you are also required to actually spend a significant part of your working time in the room during normal working hours. That is, it must be necessary for you to do your job. For example, 1-2 hours a day is not enough.

These are the three main requirements that the vast majority don't live up to - especially the first two. There are a number of additional requirements described in the section further down.

If you actually meet all the requirements, then comes the actual calculation of the deduction. The expenses you can deduct are a share of the costs related to your home such as electricity, heating and property tax, depending on whether you own or rent your home. The proportion is calculated based on the size of the room compared to the entire home, so if your room is 16 sqm. out of a home of 100 sqm, then you get 16% of the costs in deductions.

An approved example by SKAT

deduction home office
An example of what SKAT approves is a room specifically designed and equipped to practice and record music. The image above is just for illustration purposes.

In this case, the room was specially soundproofed and furnished with a significant amount of large musical instruments, technical equipment, speakers etc. Therefore, it was considered to be exclusively suitable for the recording of music and thus could not be used privately.

Other examples include a dedicated laboratory, a workshop or a design studio.

What else do you need to be aware of?

In addition to the points above, there are several key elements to be aware of with this deduction:
  • The room must be necessary for you to do your job. I.e. you may not be able to do your job without the room
  • You must receive a salary for the work you do in the room
  • You must have documentation for the costs related to the room
  • The costs must be above the minimum limit of DKK 6,200 (2019)

Check to see if you are eligible for any deductions

Home office deductions are not easy to obtain, and there are many requirements to meet.

That's why we in Tax Helper have created an easy and intuitive platform where you can easily see if you can get the deduction and get all the way across the finish line of reporting your deduction to SKAT. It is free to try out, and you only pay if you get a tax refund.