Question 1

When do I qualify to claim home office expenses from SARS?

Accepted Answer

You need a part of your home that is specifically equipped for your trade and used regularly and exclusively for that purpose. "Exclusively" is taken literally by SARS: a dedicated room used only for work qualifies, a corner of the lounge or a dining table does not. As an independent contractor earning mainly fees rather than a salary, you are not restricted by the section 23(m) limitation that blocks most salaried employees, so you can claim the full range of allowable running costs, not just rent, rates, repairs and interest.

Question 2

Is it different for an independent contractor than for a salaried employee?

Accepted Answer

Yes. A salaried employee is limited by section 23(m) and, for commission earners and employees, SARS also asks whether more than half the duties are performed in that space (or more than 50% of the year worked from home). A true independent contractor trading in their own name is carrying on a trade, so home office costs are tested only against the general deduction formula: incurred in the production of income, not of a capital nature, and the space must still meet the exclusive-and-regular-use test.

Question 3

Which home office expenses can I claim?

Accepted Answer

Typically: rent, or bond interest (not the capital portion of the bond repayment), municipal rates and taxes, electricity and water, cleaning, home insurance, security, and repairs to the premises. As a contractor you can also claim business phone and internet, stationery, and wear-and-tear on office equipment. Wear-and-tear on equipment and the full cost of business-only items are claimed in full rather than apportioned.

Question 4

How do I calculate the home office portion?

Accepted Answer

SARS accepts a floor-area apportionment: (square metres of the office ÷ total square metres of the home) × the qualifying running cost for the year. So a 15 m² study in a 120 m² home gives 12.5%; if rates, electricity, rent and repairs came to R120 000 for the year, the claim is R15 000. Measure the room once, keep the calculation and a floor plan, and apply the same percentage consistently.

Question 5

Can I claim my bond repayment or only the interest?

Accepted Answer

Only the interest portion, apportioned by floor area. The capital repayment is capital in nature and is never deductible. Use the annual interest certificate from your bank as your supporting document.

Question 6

What if I only used the home office for part of the tax year?

Accepted Answer

Apportion by time as well as by area. If you occupied the dedicated office for eight months of the year, claim the floor-area percentage of the running costs for those eight months only. Keep a note of the start and end dates.

Question 7

Does claiming a home office affect capital gains tax when I sell my house?

Accepted Answer

It can. The portion of the property used for trade is not covered by the R2 million primary residence exclusion, so that portion of the gain is subject to CGT, apportioned by area and by the period the space was used for business. For a small study over a few years the effect is usually modest, but it is worth knowing before you claim, and worth keeping the area and period records that let you work it out later.

Question 8

What records must I keep for a home office claim?

Accepted Answer

The floor-area calculation and a plan or measurements, photos of the dedicated space, the lease or bond interest certificate, municipal accounts, utility bills, insurance and security invoices, repair invoices, and a note of the dates the space was in use. SARS routinely verifies home office claims, so assume you will be asked. Keep everything for five years from submission.

Question 9

Where does the home office claim go on my return?

Accepted Answer

For a contractor trading in their own name the running costs form part of the local business, trade and professional income section of the ITR12, reducing the net profit from your trade. Salaried claims use source code 4028. In either case the deduction reduces taxable income, which in turn reduces the provisional tax you should be setting aside.

Question 10

Do I really need a logbook to claim business travel?

Accepted Answer

Yes. Without a logbook SARS disallows the entire travel claim — there is no fallback. The logbook must record opening and closing odometer readings for the tax year and, for every business trip, the date, the starting point and destination, the reason for the trip and the kilometres travelled. Private trips need only be captured as totals. Home to a client's office is business travel for a contractor; travel between home and a place you work from every day may be treated as private, so describe each trip honestly.

Question 11

What counts as business travel for a contractor?

Accepted Answer

Travel to clients, site visits, meetings, collecting stock or equipment, trips to your accountant or SARS branch, and travel between two work locations. Commuting between home and a fixed place of work is private. Because a home-office-based contractor's place of work is their home, most client travel from home is business travel — provided the logbook shows it.

Question 12

Should I claim actual costs or use the SARS deemed cost rate per kilometre?

Accepted Answer

You may use either, but be consistent for the year. Actual costs means claiming the business percentage of fuel, insurance, licence, maintenance, finance charges and wear-and-tear on the vehicle, supported by invoices. The deemed method uses the SARS cost table based on the vehicle's determined value, or the simplified rate per kilometre published for each tax year. Work out both — high-value vehicles and high-cost years usually favour actual costs; low-mileage years often favour the fixed rate.

Question 13

Can I claim wear-and-tear on my car?

Accepted Answer

If you claim actual costs, yes: the vehicle is written off over its useful life (SARS Interpretation Note 47 accepts five years for passenger vehicles), and you claim only the business-use percentage from the logbook. Finance charges on the instalment agreement are also apportioned. You cannot claim the capital repayment itself, and you cannot mix wear-and-tear with the deemed cost rate for the same vehicle in the same year.

Question 14

What if I use more than one vehicle, or a rented car?

Accepted Answer

Keep a separate logbook per vehicle and claim each on its own basis. Car rental, e-hailing and taxi fares for business trips are deductible in full against the trade — no logbook apportionment needed, just the invoice and the business reason on the slip.

Question 15

Can I deduct flights and accommodation for work trips, including overseas ones?

Accepted Answer

Yes, where the trip is undertaken in the production of your income: flights, accommodation, airport transfers, visas and travel insurance for the business portion. If a trip mixes business and holiday, apportion by days and claim only the business share. Keep the itinerary, the client correspondence that shows the business purpose, and every invoice.

Question 16

How does the subsistence allowance work when I sleep away from home?

Accepted Answer

If you are away from home overnight for business, SARS publishes deemed daily amounts for meals and incidental costs (and a separate lower amount for incidentals only) that can be claimed without keeping every slip, plus published per-country rates for foreign travel. You still need proof that you were away — the booking, the itinerary and the number of nights. Alternatively claim the actual meal and incidental costs against invoices. Choose one approach per trip.

Question 17

What travel records does SARS want to see?

Accepted Answer

The logbook for the full year with opening and closing odometer readings, the vehicle's purchase agreement or determined value, fuel and maintenance invoices if claiming actual costs, and the diary or invoices tying trips to clients. Keep them for five years. A logbook written up retrospectively from memory is the most common reason travel claims are reduced on audit.

Question 18

Is business entertainment deductible for income tax in South Africa?

Accepted Answer

There is no blanket prohibition in the Income Tax Act, so entertainment costs are tested against the general deduction formula in section 11(a): actually incurred, in the production of income, not capital and not private. A working lunch with a client or prospective client that relates directly to your trade is deductible. Socialising with friends, family meals and personal celebrations are not, even if you talk shop.

Question 19

Can I claim the VAT back on client entertainment?

Accepted Answer

Generally no. Section 17(2)(a) of the VAT Act denies input tax on 'entertainment' — food, drink, accommodation, hospitality and amusement — with narrow exceptions such as businesses whose trade is entertainment, or certain personal subsistence while away overnight on business. So the income tax deduction and the VAT position differ: claim the full VAT-inclusive amount as an income tax expense, and do not claim the input VAT.

Question 20

What must I write on the slip for an entertainment claim to hold up?

Accepted Answer

On or with every entertainment invoice record the date, who was entertained (names and their company), your business relationship with them, and the specific business purpose or matter discussed. A restaurant slip with no names is the easiest deduction for SARS to disallow. Keep the tax invoice itself, not just the card receipt.

Question 21

Can I deduct my own coffee, lunch or a co-working café bill?

Accepted Answer

Ordinary daily meals near where you work are private expenditure and not deductible, even if you are working while you eat. The exceptions are meals while away from home overnight on business (subsistence) and your own portion of a genuine client entertainment bill. A co-working desk or venue fee is a different thing — that is an ordinary business premises cost and is deductible.

Question 22

Are client gifts, year-end functions and event tickets deductible?

Accepted Answer

Modest branded promotional items and gifts given to win or keep business are usually accepted as marketing expenditure. Corporate hospitality such as sports or concert tickets is entertainment and needs the same who-and-why record; SARS is more likely to challenge it. A year-end function for staff you employ is deductible; entertaining yourself is not. Keep the invoice, the guest list and the business reason in every case.

Question 23

How much of my retirement annuity contribution is deductible?

Accepted Answer

Contributions to pension, provident and retirement annuity funds are deductible up to 27.5% of the greater of your remuneration or taxable income, capped at R350 000 per tax year. Anything above the limit is not lost — it rolls over to the following year, or reduces the tax on your eventual lump sum or annuity. Your fund's annual tax certificate is your proof.

Question 24

How do medical aid contributions reduce my tax?

Accepted Answer

They are not a deduction from income; they convert into the section 6A medical scheme fees tax credit, a fixed monthly rand amount for the main member, the first dependant and each additional dependant, subtracted from the tax you owe. As a provisional taxpayer you can take these credits into account when working out what to set aside, which is why the credits are built into the estimate on your dashboard.

Question 25

What about medical costs my scheme did not cover?

Accepted Answer

Qualifying out-of-pocket costs feed the section 6B additional medical expenses tax credit. If you are under 65 without a disability, you get 25% of the amount by which (excess contributions over four times your 6A credit, plus out-of-pocket costs) exceeds 7.5% of taxable income. If you are 65 or older, or you or a dependant has a SARS-confirmed disability (ITR-DD form), the formula is more generous: one third of excess contributions over three times the credit, plus qualifying costs. Keep the scheme tax certificate and every doctor, pharmacy and hospital invoice.

Question 26

Can I write off my laptop, desk and phone in the year I buy them?

Accepted Answer

Small items costing R7 000 or less each may generally be written off in full in the year of purchase. Above that, claim wear-and-tear over the useful life SARS accepts in Interpretation Note 47 — commonly three years for computers, six years for furniture and fittings. If the item is used partly privately, claim only the business percentage. Keep the invoice and add the item to a simple fixed asset register.

Question 27

How much of my internet, fibre and phone bill can I claim?

Accepted Answer

The business-use portion. Work out a defensible percentage — a month of itemised call and data usage, or the split between working hours and personal use — write down how you arrived at it, and apply it consistently. A dedicated business line or a data SIM used only for work is claimable in full.

Question 28

Are accountant, tax practitioner and legal fees deductible?

Accepted Answer

Fees incurred in producing your income are deductible: bookkeeping, the preparation of your business accounts, contract drafting, and debt collection. The cost of preparing and submitting your personal income tax return, and any penalties or interest SARS charges you, are not deductible. Split the invoice if it covers both.

Question 29

Can I claim bank charges and forex conversion costs on foreign payments?

Accepted Answer

Yes. Business account fees, transaction charges, payment platform fees such as Wise or PayPal, and the conversion spread or SWIFT fees on receiving foreign client payments are all incurred in producing your income. Convert the income itself at the spot rate on the day of receipt (or the average annual rate, applied consistently) and claim the charges separately.

Question 30

Software subscriptions, training and professional bodies — deductible?

Accepted Answer

Software and tools you need to do the work you invoice for are deductible in the year you pay for them. Professional body membership and licence fees related to your trade qualify. Training and courses that maintain or update the skills you already trade on are deductible; the cost of qualifying for an entirely new profession is capital in nature and is not.

Question 31

What about insurance premiums?

Accepted Answer

Business insurance — professional indemnity, public liability, and cover on equipment used for your trade — is deductible. Personal life cover, income protection premiums under current rules, and household contents cover outside the home office portion are not deductible against your trade.

Question 32

Do donations to charity reduce my tax?

Accepted Answer

Only donations to a registered public benefit organisation that issues a valid section 18A certificate, and only up to 10% of your taxable income. Anything above the 10% limit carries over to the next tax year. Keep the section 18A receipt — a bank transfer alone will not do.

Question 33

What can I definitely not claim?

Accepted Answer

Private and domestic expenditure, ordinary clothing (even if you bought it for client meetings), commuting to a fixed workplace, the capital portion of loan and bond repayments, fines and traffic penalties, SARS penalties and interest, and the cost of your personal tax return. Capital items are not expensed outright — they are written off through wear-and-tear.

Question 34

When are my provisional tax payments due?

Accepted Answer

Period 1 (IRP6) is due by the end of August, six months into the tax year, based on an estimate of your full-year taxable income. Period 2 is due by the end of February, the last day of the tax year, and settles the balance. An optional third top-up payment by the end of September helps you avoid section 89quat interest if the first two estimates fell short.

Question 35

How do deductions change what I should set aside?

Accepted Answer

Every allowable deduction lowers taxable income before the brackets are applied, and medical credits come off the tax itself. Capturing home office, travel, equipment and retirement contributions as they happen — rather than in a scramble in February — means your set-aside percentage reflects reality from month one instead of over-saving all year.

Question 36

What happens if I underestimate my income?

Accepted Answer

If your taxable income is above R1 million and your period 2 estimate is less than 80% of the final assessed amount, SARS levies a 20% underestimation penalty under paragraph 20. Below R1 million, the estimate must be at least 90% of the actual figure or equal to the basic amount from your last assessment. Late payment attracts a 10% penalty plus interest, so pay something by the deadline even if the estimate is imperfect.

Question 37

How long must I keep receipts and supporting documents?

Accepted Answer

Five years from the date you submit the return, and longer if an audit or objection is open. SARS accepts digital copies provided they are legible and readily retrievable — which is what the receipt vault in this app is for: attach the document to the expense the day it happens, and the evidence is already assembled if a verification letter arrives.

Question 38

Do I declare foreign income even if the client never withheld any tax?

Accepted Answer

Yes. South African tax residents are taxed on worldwide income, so foreign contracting fees are fully declarable regardless of where the client sits or whether anything was withheld. Convert each receipt to rands at the spot rate on the day, or use the average annual rate consistently. Where a foreign country did withhold tax, a section 6quat foreign tax credit may be available against your SA liability.

SARS deductions, answered

Home office expenses

Business travel & vehicle

Business entertainment

Other allowable deductions

Provisional tax & record keeping

Claim them where they count — every month