Mobile Phone Costs — New Zealand Tax Rules

Claim the business-use proportion of your mobile phone plan, data, and handset cost against NZ income tax.

Claimable: Partially claimable · Tax authority: Inland Revenue

Inland Revenue Rules

• Claim the business-use proportion of your monthly phone bill — calls, texts, and data.
• For a dual-use phone, estimate the proportion of business use vs personal use by reviewing a typical month of call records.
• A dedicated business phone used solely for work can be claimed in full.
• The handset cost (if over NZ$1,000) must be depreciated over its useful life — typically 2–3 years — at the business-use proportion.
• Handsets costing NZ$1,000 or less (GST exclusive) can be expensed immediately as low-value assets, at the business proportion.
• IRD expects a reasonable and consistent basis for the business-use estimate — document your methodology.

Limits

No fixed cap — claim must reflect genuine business-use proportion. Typical sole trader claims range from 40% to 80% of total phone costs.

Worked Example

Tane uses his phone 65% for business. His annual plan costs NZ$1,200 and his handset cost NZ$800 (under the NZ$1,000 low-value threshold). He claims: plan NZ$1,200 × 65% = NZ$780; handset NZ$800 × 65% = NZ$520. Total claim: NZ$1,300. He noted his usage estimate is based on reviewing two months of call logs showing 65% of calls were to clients or suppliers.

Record Keeping

• Keep monthly phone bills for the full tax year
• Document your business-use percentage estimate with supporting reasoning
• Keep the handset purchase receipt and note the date of purchase
• Review call logs periodically to verify your business-use estimate is still accurate
• If using a dedicated business SIM, keep those bills separately

Frequently Asked Questions

Can I claim 100% of a second phone used only for business?

Yes. A dedicated business phone used exclusively for work calls, client messaging, and business data is 100% deductible. Keep the phone plan bills as evidence and ensure it is clearly used only for business purposes.

How do I estimate business use on a mixed-use phone?

Review one to two months of call records and data usage. Calculate what percentage of calls were to clients, suppliers, or for business research vs personal contacts. Apply that percentage consistently to the full year's bills. A documented estimate is sufficient — IRD does not require a full year's log.

Can I claim business apps and software subscriptions accessed on my phone?

Yes. Software subscriptions and apps used for business — accounting apps, project management tools, note-taking software, and cloud storage — are deductible expenses. If used exclusively for business, claim 100%; if mixed, apply the same business-use proportion as your phone plan.

My phone plan includes international roaming — can I claim calls made overseas for business?

Yes. Business calls made while travelling internationally on your standard plan, or any international roaming data used for business, are claimable at the business-use proportion. If you have significant overseas business calls, note the specific charges on your bill to support a higher business-use claim for those periods.

Does claiming phone costs reduce my Provisional Tax?

Yes — every deductible expense, including your business phone costs, reduces your net profit. A lower net profit means a lower Residual Income Tax (RIT) figure, which in turn reduces the amount you pay in Provisional Tax instalments. If your RIT stays below NZ$5,000, you exit the provisional tax system entirely for that year.