Claiming PAYE from Home

With the Outbreak of the Corona Virus, more and more employees were forced to start working from home. Remote work is no longer a term for freelancers and gig workers, but everyone’s present daily. The work culture has evolved massively and Flexible employment became the new buzzword.

With all that said, what does this mean for employees and the tax rules around home office expenses? SARS may allow these employees to deduct their home office costs, within the “Other Deductions” section of the ITR12.

It is important to remember though, that these deductions are only allowed under certain specific conditions.

What is required to deduct home office expenditure?

  • The employer must allow you, the employee to work from home ( A letter from the employer will be sufficient)
  • The employee must spend more than half of their total working hours, working from home
  • A section of your home must be used exclusively equipped and used for work. E.g. when you meet with a client and you

What Expenses can be deducted?

To know what you can claim, one will have to look at your remuneration structure.

Employees who earn a commission and take home more than 50% of their total remuneration in the form of commission.

o   Rent

o   Interest in Bond

o   Repairs to the premises

o   Rates and taxes

o   Cleaning

o   Internet

o   Wear and Tear

o   Ad-hoc expenses, such as Telephone, Stationary, Repairs to office equipment to name a few.

Salary paid employees with variable payments, where a commission is less than 50% of their total remuneration

o   Rent

o   Interest n Bond

o   Repairs to the premise

o   Rates and taxes

o   Cleaning

o   Internet

o   Wear and Tear

o   Other expenses relating to their house only

How to calculate the Home office deduction.

One needs to work out the total square meterage of the home office in relation to the total square meterage of the house, and then convert this to a percentage. One then applies this percentage to the home office expenditure to calculate the portion, which is deductible.

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