Rooms used for both daycare and personal living
If you use part of your home for both your daycare and personal living, calculate how many hours in the day you use the rooms for daycare, then divide that amount by 24 hours. Multiply the result by the daycare part of your total annual home expenses (see the previous example). This will give you the home expenses you can deduct.
If you run the business for only part of the week or year, reduce your claim accordingly.
Example
Danny runs a daycare in his home weekdays from 7:00 a.m. to 5:00 p.m. (10 hours out of a 24-hour day.) The children use an area of 35 square metres. The house is 100 square metres, and the annual home expenses are $5,800.
The calculation is as follows:
(10 ÷ 24 hours) × (35 ÷ 100 metres) × $5,800 expenses = $845.83
The daycare only operates 5 days per week, so Danny has to do another calculation.
The other calculation would be:
$845.83 × (5 ÷ 7 days) = $604.16
Danny can deduct a total of $604.16 for home expenses.