How does the default claim ratio (%) work?

The default claim ratio in Prosaic is designed to simplify the process of allocating expenses between business and personal use. Here’s how it works:

• Home Office Percentage: At this time, you can set one default claim ratio based on your home office percentage. For example, if your home office occupies 20% of your home, you can set the default claim ratio to 20%.
• Automatic Calculations: Once the default ratio is set, Prosaic automatically applies it to relevant expenses, ensuring that only the business-related portion is claimed. This streamlines your bookkeeping and helps maintain accurate records for tax purposes.
• Telephone and Internet: We default the claim ratio for telephone and internet expenses to 50%. This is a common standard, but you can adjust it based on your actual business usage.
• Custom Ratios: While currently limited to one default ratio for home office expenses, you can override any expense or group of expenses with a custom ratio. This flexibility allows you to accurately reflect actual usage for different expenses as needed.
• Future Enhancements: We plan to add more default ratios over time, providing even greater precision and ease in managing your expense claims.

For more detailed guides on common default ratios, refer to the IRD website.

Using the default claim ratio ensures that your expense claims are consistent, accurate, and in line with tax regulations, saving you time and reducing the risk of errors.