The 2025 working room allowance - what should an entrepreneur know?
The business premises allowance is one of the most important tax deductions, but many entrepreneurs fail to take advantage of it. Properly implemented, the deduction can easily bring hundreds or even thousands of euros in tax benefits - whether it's a home office or a separately rented office space.
The deduction should be used while it is still possible: the government's mid-term plan for spring 2024 proposed to abolish the deduction from 2026 onwards.
Basic principles of the working deduction
What is the office allowance?
The workroom deduction is a tax deduction for the cost of the space used to carry out the work. The deduction is available when the work is carried out wholly or partly at home, in a rented office or in an office hotel. The purpose of the deduction is to take account of the costs of the work-related premises, such as rent and electricity.
Schematic vs. actual costs
There are two ways to make the deduction:
The first option is a formula deduction, which is a fixed amount defined by the Tax Administration without separate supporting documents. In 2025, the formula deduction amounts are €960 per year for full-time work in a workroom, €480 per year for part-time work and €240 per year for occasional work. It is worth noting that the formula deduction is often lower than the deduction based on actual costs, especially in expensive areas or where the workroom is a large part of the dwelling.
The second method is a deduction based on actual costs, which calculates the actual costs of the office, both for one-off purchases and for fixed costs. This requires more detailed accounting and documentation work.
Working room allowance for different types of enterprise
The treatment of the business premises deduction depends essentially on the type of business the entrepreneur is running. The main differences will be discussed.
A partner entrepreneur in a limited liability company has two main options for taking advantage of the deduction:
As a personal deduction - When you work from home for your limited company, you can claim a standard deduction (€960/480/240) on your personal tax return as an income-earning expense.
By renting a study room to the company - The company can pay you rent for a study room in your home. This rent is a deductible expense for the company and taxable capital income for you. The important thing is that the rent is in line with market rates - overcharging can be interpreted as a disguised dividend with tax consequences.
If a limited company rents external office space or office hotel accommodation, all the costs associated with these are fully deductible by the company. This is the simplest way to manage office expenses in a limited company.
The self-employed entrepreneur also has two options:
Deduction based on actual expenses - You can deduct office expenses directly as business expenses. If the study is located in your home, the expenses are apportioned based on the area of the study in relation to the entire dwelling. For example, in an 80 m2 dwelling, a 16 m2 study entitles you to deduct 20% of your living expenses.
Formulaic deduction - Alternatively, you can use the personal tax deduction for your office, which has the same formulaic amounts of €960/480/240 depending on how you use it.
For a business name, it is always worth calculating which method will produce a larger deduction. If the living expenses are high or the share of office space is significant, deducting actual expenses is typically the cheaper option.
Light entrepreneurs operate through invoicing services, which puts them in the same position as employees for tax purposes. In this case, the same formulaic working deduction amounts apply. Light entrepreneurs cannot benefit from the deduction based on actual expenses, as they do not have a formal business activity.
How to calculate the deduction for office accommodation based on actual costs?
The deduction based on actual costs is calculated as follows:
Calculate total housing costs per year (rent/response, electricity, water, heat, internet)
Calculate the proportion of the total floor area of the dwelling occupied by the study
Multiply the total costs by the share of the office
Example: a 100 m² apartment with a 15 m² office, rent 900 €/month, electricity 80 €/month, internet 40 €/month.
Annual costs: (900 € + 80 € + 40 €) × 12 months = 12 240 €
Office share: 15 m² / 100 m² = 15% Deduction: 12 240 € × 15% = 1 836 €
This exceeds the formula deduction (€960), so in this case you should opt for a deduction based on actual expenses.
Small purchase limit and treatment of depreciation
Furniture and equipment purchased for a workroom are usually deductible. In 2025, the small purchase threshold will be €1 200, which means that purchases below this amount can be fully deducted at once.
The most expensive purchases and investments are deducted as depreciation, which may not exceed 25% of the annual expenditure balance (Article 30 of the FR), so for furniture, an annual depreciation of 20-25% is typically used.
For example, the purchase of a €2 000 workstation for a limited company would be depreciated in the first year by €2 000 × 25% = €500, in the second year by €1 500 × 25% = €375, and so on.
It is important that purchases are clearly linked to the work and that all receipts are kept.
Tax treatment of hybrid work
More and more entrepreneurs are working part of the time from home and part from the office. In this case, the office deduction is determined by the occupancy rate.
If you work mainly from home (3-5 days a week), you can claim the full €960 deduction. If you work from home 1-2 days a week, you will get a deduction of €480. For occasional work, you can claim a deduction of €240.
It is perfectly possible to combine both the formulaic home office deduction and the actual costs of an office hotel in the same tax year. In this case, it is important that the distribution of working days can be verified by a logbook, if necessary.
Home office vs. office hotel
For many entrepreneurs, a key question is whether it pays to work from home or rent a separate office space.
The advantages of a home office are that you don't have to pay a separate rent, you can work flexibly and your overall costs are lower. The disadvantages are a more limited right to deduct, and easier mixing of work and leisure. The tax effect is either a formulaic deduction of €960 or a share of actual expenses.
An office hotel or rented office space, on the other hand, offers full deductions, a professional environment and networking opportunities. The disadvantages are higher overall costs and potentially longer commuting times.
However, when assessing the overall impact, productivity, job satisfaction and other benefits of a professional working environment, such as networking opportunities, must also be taken into account.
Summary and main points to remember
The deduction is a significant tax advantage, the optimal use of which can bring significant savings to the entrepreneur. The key is to compare the options by calculating the benefit of both the standard deduction and the deduction based on actual costs. Careful documentation is key - keep receipts, take pictures of the office and keep a record of working days.
It is also important to take into account the impact of your business form on deductions, as limited companies, partnerships and small businesses require different approaches. Tax planning should start during the financial year, not just at the stage of filling in your tax return. Also, be sure to follow any changes to the workplace deduction on the Tax Administration's website from the end of 2025.
But a professional working environment is more than a tax deduction for entrepreneurs - it is an investment in productivity, job satisfaction and a professional image. An office hotel offers the best of both worlds: a professional environment without a long commitment or a large initial investment.
The following sources have been used in this article:
Take a look at the available office space in Helsinki and Espoo and calculate how choosing the right working environment can benefit both your business and your taxes. Take a step towards a more productive career - and optimise your tax benefits at the same time.
