Where are the cheap seats - home or away?

People are increasingly weighing up the financial advantages and disadvantages of a home office versus a shared space, writes Kate Jones.

To work from home, or not to work from home? That is the question facing many Australian workers.

Setting yourself up to work from a room at home should be simple and cost-effective.

But a growing trend towards shared work spaces has given people who work from home a new option.

So, how do the costs stack up?

Is it more prudent to set up shop from home or get settled elsewhere?

And what's the more productive solution?

The national spokeswoman for the Institute of Chartered Accountants on small and medium enterprises, Sue Prestney, says working from home easily wins the contest when it comes to savings.

"If you're working from home, you're probably always going to be ahead on costs because you're saving rental fees and saving on travel," she says.

While working from home may seem like an easy way to pay less tax, Prestney says there are strict rules guiding at-home workers on what can and cannot be claimed as tax deductions.

This all hinges on whether your home work area qualifies as a home office or a "principal place of business".

To be a "place of business", you must have an area of your home set aside exclusively for your business.

This could be a tradesperson or artist who has a studio, or a health professional who operates a consulting room from home.

In addition to utility costs, these people can claim occupancy expenses such as rent, mortgage interest, rates and insurances. Accountants usually calculate this on the floor area as a proportion of the total floor area in the home, Prestney says.

However, home workers paying off a mortgage should be aware they could be jeopardising their capital gains exemptions.

As for those with a simple home office, they can claim incremental costs of their gas, electricity and phone bills.

After doing the maths, it's easy to see why so many budget-conscious start-ups prefer to set up shop from home.

But Prestney says the working-from-home decision is not as simple as weighing up the costs.

"You have to work out whether it's the best option for your business, whether you work efficiently from home, whether you have access to support services and whether you feel isolated," she says.

"For many businesses, it's a nursery scenario. They start at home and that's where they nurture their business. Then it's just a matter of when to take the big step and leave the nest."

Working exclusively from home or for just some of the time, also called teleworking, is becoming an increasingly popular choice.

In 2001, more than 980,000 Australians were working all or most of the time from home, according to the Australian Bureau of Statistics. By 2005, that figure had skyrocketed to 2.32 million.

Working from home is frowned upon by a number of employers who see it as a non-productive option.

Marissa Mayer, the chief executive of internet giant Yahoo!, created worldwide headlines when she banned all employees from working at home.

Her ban sparked a backlash by business leaders, including Sir Richard Branson, who say working remotely is now easier than ever.

The team behind Hub caught on to this early, creating more than 30 "co-working communities" or shared office spaces, across six continents. Melbourne is Hub's first foray into Australia and, since its launch in 2011, more than 650 individuals and organisations have signed on as members. Depending on the level of membership, "Hubbers" have access to a private desk, meeting spaces, high-speed wi-fi, printing, tea and coffee, a mailing address and even business coaching.

Jennie Geisker considered joining Hub after leaving her corporate fashion job to set up her own design business.

"It's set up for entrepreneurs and people who want to get out of the house, out of the comfort zone and into reality," she says.

"But I couldn't justify spending a few hundred on something I'm not sure I'll gain anything from." Geisker decided to get started at home, and since launching her women's business shirts label in 2010, says working at home has allowed her to put more money into her start-up.

"Financially, being a start-up, I need to save as much money as possible," she says.

"Working from home lets me save on utilities, travel costs, commute time and expenses, parking and stock storage. It also frees up more of my time if something urgent arises, then I can go to work in the middle of the night or whenever I have to.

"In the long term, as the business grows, I may need to work off-site. Ideally, if money is no issue, working off-site would be better.

"You can meet and greet clients more professionally, have a showroom. Not to mention being able to interact with people, as working from home can be isolating."