Deductions for home office expenses

It has become common in recent times for employers to require or permit employees to work from home.

There are certain work-related expenses you can claim as part of your home office. These expenses only apply to the section of your home that is used exclusively for work. These expenses also apply to taxpayers who earn mainly commission, independent contractors or freelancers.

Requirements to deduct (at least some) home office expenses:

  • Home office must be used for purposes of trade
  • Regularly and exclusively used for trade
  • Must be specifically equipped for the purpose of trade
  • For employees or office holders, duties must be mainly (more than 50%) performed-
  • for commission-earners, outside of employer premises 
  • for all other employees and office holders, in the home office

Examples of home office expenses are as follows :

  • Depreciation of home office expenditure
  • Work related internet and data costs
  • Home Office Equipment
  • Office space cleaning
  • Home office repairs and maintenance

The following expenses are % based on the size of your home office :

  • Electricity
  • Rates
  • Rental costs
  • Interest on bond payments

Freelancers can also claim phone and stationary costs.

It is VERY important to note that SARS is particularly pedantic over allowing these expenses, so please make sure all the criteria is met and can be proven to SARS.

How to calculate your home office expenditure :

To separate work expenses from living expenses, you need to know what percentage of your home’s overall sqm is taken up by your home office. This must not be an estimate

Let’s say your office space takes up 10% of your home’s overall floor space. This means you can claim 10% of the work related expenses

  • Total floor space = 50sqm
  • Office space = 5sqm
  • As a percentage:  5/50 * 100 = 10%
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So if your monthly expenses are R 85 000 then you would only be allowed to claim R 8 500 – See below

Office space over total floor space] x [total running costs per annum]

= 0.10 x (rates + electricity + rental)

=0.10 x (10,000 + 5000 + 70,000)

=0.10 x 85,000

= R 8 500

Please find a link below for a detailed explanation on home office expenditure as found on the SARS website.