The South African Revenue Services (SARS) says that workers are allowed to claim for home office expenses – but only under very specific circumstances.
The tax collector said that these deductions are outlined in the Income Tax Act as follows:
- If the room is regularly and exclusively used for the purposes of the taxpayer’s trade e.g. employment, and is specifically equipped for that purpose. The home office must be set up solely for the purpose of working.
- If the employee’s remuneration is only salary, the duties are mainly performed in this part of the home. It, therefore, means you perform more than 50% of your duties in your home office.
- Where more than 50% of your remuneration consist of commission or variable payments based on your work performance and more than 50% of those duties are performed outside of an office provided by your employer.
In an updated guidance note published on Wednesday (17 November), SARS provided a further breakdown of who qualifies and under what circumstances.
The full guidance note and some of the key issues are detailed below. More information about tax and working from home can be found on SARS’ website here.
What documents do I need?
SARS said that the following should be included:
- Letter from employer permitting remote work – including the period that remote work was allowed and where available dates that the employee did not report to the office.
- Floor plan showing dedicated space and calculation of proportion in relation to total buildings on the property – this does not need to be a municipal or council plan of the home, but can be an informal but accurate drawing of the floor plan.
- Photographs showing dedicated space, specifically equipped.
- Schedule showing calculation that work was mainly from home – in other words, showing that more than 50% of all work for the year was from the home office, including any supporting evidence.
- Actual invoices of claimed expenses with proof of payment.
- Schedule of amounts claimed and apportionment calculations.
If I have to pay for a dedicated Wi-Fi/internet link for my home office, would this be claimable?
Wi-Fi equipment that is owned by a taxpayer may qualify for a wear-and-tear allowance.
Other Wi-Fi expenditures, for example, monthly subscriptions and certain installation charges, are not permitted as a deduction for home office purposes, SARS said.