Home Office as a Self-Employed: What Costs Can You Deduct
Home Office as a Self-Employed: What Costs Can You Deduct
More and more freelancers are working from home — whether as programmers, designers, copywriters, accountants, or translators. Working from home saves time and money on commuting, but it also raises one key question: which housing-related costs can I deduct from my taxes?
The answer depends on whether you're claiming actual expenses or flat-rate expenses. If you opt for flat-rate expenses (a percentage of your income), this question doesn't apply — all costs are already included in the flat rate. However, if you keep tax records using actual expenses, you can deduct a proportional share of your housing costs that are demonstrably related to your business.
In this article, we'll take a detailed look at how to correctly calculate and document home office expenses, which costs are tax-deductible, and walk through practical examples to help you optimise your tax liability.
The Basic Rule: Actual Expenses vs. Flat-Rate Expenses
Before we dive into the details, there's one fundamental distinction to clarify.
Flat-rate expenses = home office costs are not relevant
If you claim flat-rate expenses (as a percentage of income), you cannot add any additional actual costs on top. Flat-rate expenses already cover all business-related costs — including rent, utilities, internet, and more.
Claiming home office expenses therefore applies exclusively to OSVČ who keep tax records using actual expenses.
| Type of trade | Flat-rate expenses | |---|---| | Agricultural production | 80% | | Craft trades | 80% | | Other trades (general) | 60% | | Other business, royalties | 40% | | Rental of assets included in business property | 30% |
When Do Actual Expenses Pay Off?
Actual expenses are worth using when your real business costs are higher than the flat-rate expenses. This is typically the case for self-employed individuals who:
- Pay high rent for the flat they work from
- Have expensive equipment (computers, printers, software)
- Use a car for business (fuel costs, depreciation)
- Employ workers
Tip: Compare both options
Before filing your tax return, always calculate both options — actual expenses and flat-rate expenses. Choose whichever gives you a lower tax base (and therefore lower taxes and contributions). You can switch between the two every year.
What Home Office Costs Are Tax-Deductible
The Income Tax Act (§ 24) stipulates that tax-deductible expenses are those incurred for the purpose of achieving, securing, and maintaining taxable income. For home office purposes, this means the following categories of costs in practice:
1. Rent (or Property Depreciation)
If you live in a rented property and use part of it for business, you can deduct a proportional share of the rent corresponding to the proportion of floor space used for business purposes.
Calculating the Proportional Share of Rent
Formula: Tax-deductible amount = total rent × (office area / total flat area)
Example:
- Total flat area: 65 m²
- Office area: 13 m²
- Ratio: 13 / 65 = 20%
- Monthly rent: 18,000 CZK
- Tax-deductible amount: 18,000 × 20% = 3,600 CZK/month = 43,200 CZK/year
If you own the property: Instead of rent, you can claim depreciation on the portion of the property included in business assets, or a proportional share of maintenance and repair costs. However, including a property in business assets has implications for any future sale (tax exemption upon sale), so this option needs careful consideration.
2. Utilities (Electricity, Gas, Heat)
Costs for electricity, gas, and heating can be deducted in proportion to their business use.
Calculating the Proportional Share of Utilities
Approach A — by floor area: The same ratio as for rent (the office's share of the total floor area).
Example:
- Annual electricity costs: 36,000 CZK
- Office ratio: 20%
- Tax-deductible amount: 36,000 × 20% = 7,200 CZK/year
Approach B — by actual consumption: If your office has a separate electricity meter, or you can demonstrably document the consumption (e.g. a high-powered computer setup, printers), you can claim actual consumption. This approach is more precise but harder to substantiate.
Gas and heat:
- Annual gas/heat costs: 24,000 CZK
- Office ratio: 20%
- Tax-deductible amount: 24,000 × 20% = 4,800 CZK/year
3. Internet
Internet access is an essential work tool for most self-employed people working from home. The question is how much of it you can deduct.
Internet — proportion of business use
If you use the internet for both business and personal purposes (streaming, social media, etc.), you should only claim the proportional share corresponding to business use.
In practice, 50–80% of the total internet cost is typically claimed, depending on the nature of the work and how it's used.
Example:
- Monthly internet cost: 600 CZK
- Business use: 70%
- Tax-deductible amount: 600 × 70% = 420 CZK/month = 5,040 CZK/year
If your internet connection is used exclusively for business (e.g. a dedicated business connection separate from your home network), you can claim 100%.
4. Phone and Mobile Data
The same principle applies as with internet — the ratio of business to personal use.
Phone — tax-deductible share
Ideal approach: Analyse your call records and separate business calls from personal ones.
Practical approach: Set an estimated ratio (e.g. 60% business, 40% personal) and claim the corresponding share.
Example:
- Monthly plan: 799 CZK
- Business ratio: 60%
- Tax-deductible amount: 799 × 60% = 479 CZK/month = 5,748 CZK/year
Tip: The most advantageous solution is to have two phones or two SIM cards — one purely for work, one personal. You can then claim the work one at 100%.
5. Water and Waste Collection
Water and waste collection costs are claimed using the same ratio as other housing costs — typically based on the office's share of the total floor area.
6. Property Insurance
If you pay insurance on your flat or house, the proportional share corresponding to business use can be claimed as a tax-deductible expense.
7. Office Equipment
This is a separate category, not directly related to housing costs, but to equipping your home office:
📊Home office equipment — tax deductibility
Threshold for tangible assets
From 2025, the threshold for classifying an item as tangible fixed assets (and therefore subject to mandatory depreciation) is set at 80,000 CZK. Items with an acquisition cost below 80,000 CZK (excluding VAT) can be claimed as a one-off expense in the year of purchase.
How to Determine the Ratio — Calculation Methods
The key question when claiming home office expenses is how to establish and justify the ratio of business use. The tax office can challenge your ratio, so it's important to have a rational basis for it.
Method 1: Floor Area Ratio (Most Common)
📋How to determine the ratio by floor area
Advantages: Simple, easy to justify, and routinely accepted by the tax office.
Disadvantages: Doesn't account for different intensities of use (an office used 8 hours a day vs. a living room used for 2 hours).
Method 2: Time Ratio
If you don't have a dedicated room and work at, say, your kitchen or dining table, you can determine the ratio based on hours of use.
Example: You work at a table in your living room for 8 hours a day, 5 days a week. The living room makes up 30% of the flat's total area. Business use ratio of the living room: 8/24 = 33%. Resulting ratio for the flat: 30% × 33% = approx. 10%.
Method 3: Combined Approach
In practice, the most accurate approach is a combination of both methods — room area × proportion of business time spent in that room.
Advice from the experts
The tax authorities do not prescribe a strict method for calculating the ratio. What matters is that the ratio is reasonable and justifiable. An excessively high ratio (e.g. 60% of a small flat where you live with your family) will attract scrutiny during an audit. The typical range for a standard flat is 10–30%.
Practical Examples — Complete Calculations
Example 1: Web Developer in Rented Accommodation
Pavel works as a self-employed web developer. He rents a three-bedroom flat in Brno. He uses one room (15 m² out of a total of 75 m² = 20%) as his office.
Pavel's home office costs
Business income: 960,000 CZK/year
| Expense | Total/year | Ratio | Tax-deductible amount | |---|---|---|---| | Rent | 216,000 CZK | 20% | 43,200 CZK | | Electricity | 30,000 CZK | 20% | 6,000 CZK | | Gas (heating) | 18,000 CZK | 20% | 3,600 CZK | | Internet | 7,200 CZK | 80% | 5,760 CZK | | Phone | 9,588 CZK | 70% | 6,712 CZK | | Water + waste | 6,000 CZK | 20% | 1,200 CZK | | Flat insurance | 3,600 CZK | 20% | 720 CZK | | Total home office | | | 67,192 CZK |
Other business expenses:
- New laptop: 45,000 CZK
- Monitor: 12,000 CZK
- Software (licences): 18,000 CZK
- Office supplies: 3,000 CZK
- Other total: 78,000 CZK
Total actual expenses: 67,192 + 78,000 = 145,192 CZK
Comparison with flat-rate expenses:
- Flat-rate expenses at 60%: 960,000 × 60% = 576,000 CZK
- Actual expenses: 145,192 CZK
Conclusion: Flat-rate expenses are significantly more advantageous (576,000 vs. 145,192 CZK). Pavel should opt for the flat rate.
Example 2: Accountant in Owner-Occupied Flat
Marie is a self-employed accountant. She owns a two-bedroom flat (55 m²) and uses one room (12 m² = 22%) as her office. She has 15 clients and genuinely high costs for software and equipment.
Marie's home office costs
Business income: 720,000 CZK/year
| Expense | Total/year | Ratio | Tax-deductible amount | |---|---|---|---| | Service charge (owners' association) | 36,000 CZK | 22% | 7,920 CZK | | Electricity | 24,000 CZK | 22% | 5,280 CZK | | Heat | 30,000 CZK | 22% | 6,600 CZK | | Internet | 9,600 CZK | 90% | 8,640 CZK | | Phone | 11,988 CZK | 80% | 9,590 CZK | | Water + waste | 4,800 CZK | 22% | 1,056 CZK | | Total home office | | | 39,086 CZK |
Other business expenses:
- Accounting software (annual licence): 24,000 CZK
- Printer + toner: 8,000 CZK
- Liability insurance: 6,000 CZK
- Training and professional development: 12,000 CZK
- Office supplies: 5,000 CZK
- Other total: 55,000 CZK
Total actual expenses: 39,086 + 55,000 = 94,086 CZK
Comparison with flat-rate expenses:
- Flat-rate expenses at 40% (other business): 720,000 × 40% = 288,000 CZK
- Actual expenses: 94,086 CZK
Conclusion: Flat-rate expenses are still more advantageous here too. However, note that Marie's flat rate is only 40%, so the difference is smaller than in Pavel's case.
Example 3: Architect with High Costs
Tomáš is a self-employed architect. He rents a large four-bedroom flat (120 m²) in Prague, where he has a large office equipped with a plotter and technical workstation (30 m² = 25%).
Tomáš's home office costs
Business income: 1,800,000 CZK/year
| Expense | Total/year | Ratio | Tax-deductible amount | |---|---|---|---| | Rent | 360,000 CZK | 25% | 90,000 CZK | | Electricity | 48,000 CZK | 35%* | 16,800 CZK | | Gas (heating) | 36,000 CZK | 25% | 9,000 CZK | | Internet | 12,000 CZK | 90% | 10,800 CZK | | Phone | 14,388 CZK | 75% | 10,791 CZK | | Water + waste | 8,400 CZK | 25% | 2,100 CZK | | Flat insurance | 7,200 CZK | 25% | 1,800 CZK | | Total home office | | | 141,291 CZK |
*Higher electricity ratio due to energy-intensive equipment in the office (plotter, high-performance PC setup).
Other business expenses:
- Workstation: 75,000 CZK
- Plotter (depreciation): 35,000 CZK (annual depreciation)
- CAD software: 60,000 CZK
- Liability insurance: 15,000 CZK
- Travel costs (clients): 48,000 CZK
- Training and conferences: 20,000 CZK
- Professional indemnity insurance: 12,000 CZK
- Office supplies: 10,000 CZK
- Other total: 275,000 CZK
Total actual expenses: 141,291 + 275,000 = 416,291 CZK
Comparison with flat-rate expenses:
- Flat-rate expenses at 60%: 1,800,000 × 60% = 1,080,000 CZK
- Actual expenses: 416,291 CZK
Conclusion: Flat-rate expenses are still more advantageous. Actual expenses would only pay off with extremely high operating costs.
When do actual expenses genuinely pay off?
In practice, actual expenses tend to work out better for self-employed individuals who:
- Have very high material costs (tradespeople, manufacturers)
- Employ workers
- Run a vehicle with significant associated costs
- Have a flat rate of only 30–40% (rental income, other business)
- Pay for commercial premises
For the majority of self-employed people working from home in service industries, flat-rate expenses are more advantageous, because real home office costs rarely reach 40–60% of income.
Documentation and Records — What to Keep
If you decide to go with actual expenses, you need to be ready to substantiate all costs in the event of a tax audit.
📋What documents to keep
How long to keep records
Tax return documents must be kept for as long as the return can be audited — generally 3 years from the end of the filing deadline (up to 5+3 years in the case of a tax loss). In practice, we recommend keeping records for at least 5 years.
Common Mistakes When Claiming Home Office Expenses
Mistake 1: Claiming Home Office Expenses Alongside Flat-Rate Expenses
Flat-rate expenses and actual expenses cannot be combined. If you choose the flat rate, all costs are already included in it.
Mistake 2: An Excessively High Ratio
Claiming 50% of a small flat where you live with a partner and children is unreasonable and will likely be rejected by the tax office.
Mistake 3: Missing Documentation
Without documentation, expenses cannot be claimed. Utility bills are easily lost — scan or photograph them on an ongoing basis.
Mistake 4: Including Purely Personal Expenses
TV licence, Netflix, gym membership — these are not business expenses, even if you work from home.
Mistake 5: Overlooking VAT
If you are VAT-registered and claiming a proportional share of costs, you must also correctly claim the VAT deduction — and in the appropriate proportion.
Special Situations
Coworking Spaces
If you use a coworking space instead of a home office, the cost of renting a workspace is fully tax-deductible (100%). There are no ratios to work out — it's a straightforward business expense.
Renting a Separate Office
Similarly to coworking — if you rent a standalone office, the full rent and utilities are fully deductible.
Property Included in Business Assets
If you include a property (or part of one) in your business assets, you can claim depreciation and other related costs. However, be aware — if you later sell the property, you will not be entitled to the income tax exemption that applies after 5 (or 10) years of ownership. This decision therefore deserves very careful thought.
Working from a Property You Neither Own Nor Pay Rent For
If you live rent-free (with parents, a partner) and have no housing costs, there is nothing to claim. You can, however, claim utility costs if you can demonstrably show that you are the one paying them.
Frequently Asked Questions (FAQ)
Can I deduct my full rent if I work from home?
No. You can only deduct the proportional share corresponding to business use. The full rent would only be deductible if the entire flat were used exclusively for business — which is not possible for a flat you live in.
Do I need a dedicated room to use as an office?
No, but having one makes it significantly easier to establish and justify the ratio. If you work at a table in your living room, the ratio will be harder to determine and will be lower.
Can I claim the costs of renovating my home office?
Yes, for repairs and maintenance (painting, fixing the floor). Structural improvements (conversions, extensions) costing over 80,000 CZK must be depreciated. Always only in the corresponding proportion of business use.
What if the ratio changes during the year (e.g. I move)?
The ratio can change during the year. What matters is that it reflects reality. For the months in your previous home, you apply the original ratio; for the months in your new home, you apply the new one.
Can the tax office challenge my ratio?
Yes. The tax office can request that you substantiate your stated ratio during an audit. This is why it's important to have a documented calculation (floor plan, measurements, justification). If the ratio is reasonable and properly supported, the tax administrator will typically accept it.
Are utility bill advance payments tax-deductible?
Tax-deductible amounts are those actually paid. Utility advances are settled once a year — it is therefore advisable to enter figures in your tax records based on the annual settlement statement rather than the interim advance payments made throughout the year.
Summary: What Home Office Costs Can You Deduct
📊Overview of home office costs and their deductibility
Conclusion
Claiming home office expenses can reduce your tax liability, but in practice the flat-rate expenses option remains more advantageous for the majority of self-employed people in service industries. Actual expenses — including home office costs — make sense primarily when your real costs exceed the applicable flat rate.
If you do opt for actual expenses, the key is thorough documentation — keep your receipts, document your ratio, and maintain clear and organised tax records.
DokladBot helps you track receipts for home office expenses and all other business costs. Simply photograph your electricity bill or internet invoice via WhatsApp — DokladBot will automatically recognise it, categorise it, and save it. By the end of the year, you'll have everything you need for your tax return in one place.
Try DokladBot and keep your home office expenses under control →
Useful links to official sources:
- Czech Financial Administration — Tax News for 2026
- Czech Financial Administration — Tax Return Filing Instructions
This article is intended as a general informational overview and does not replace individual tax or legal advice. The tax deductibility of specific costs depends on individual circumstances and the assessment of the tax administrator. Information is current as of February 2026.
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