Rooms used for daycare
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Rooms used for daycare
On this page, you will find information on the following:
Rooms for daycare use only
If you use one or more rooms, including any in the basement, only for your daycare, you can determine the amount to claim based on the area of your home.
You divide the area used for your daycare by the total area of your home, and multiply this result by your total annual home expenses.
Example
Sonia has a daycare in her home and uses the basement only for this business. The daycare area is 20 square metres and the total area of her home is 120 square metres. Sonia’s annual household expenses are $6,000. She calculates the deductible part of her allowable expenses using the formula:
Area used for business divided by the total area of the home multiplied by total expenses.
The calculation is as follows:
(20 ÷ 120 metres) × $6,000 in household expenses = $1,000
Sonia can deduct $1,000 of her household expenses as business–use–of–home expenses.
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. His house is 100 square metres, and his annual home expenses are $5,800.
The calculation of his home expenses 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 $604.16 of his household expenses as business-use-of-home expenses.
- Date modified:
- 2017-01-03