Working from home: claim tax for office expenses
Whether you’re working from home (WFH) full-time or hybrid, using your personal premises for work means you could get a tax deduction on your home office expenses. Since it can be tricky to navigate the complexities of claiming tax for WFH, here’s a breakdown of the basics.
What are the criteria for claiming office expenses?
- Before you start counting the cash you’ll save, ensure you’re eligible for the tax benefit and that you’ve claimed correctly: You must be employed by a company and work from home at least 50% of your time or earn at least 50% of your income from commission.
- You need a specific space (i.e. a room) exclusively used for the purposes of trade (i.e. work), set up accordingly, and most of your work duties must be performed in this part of your home.
How does it work?
Your home office expenses are calculated based on the proportion of the space your home office makes up of your total house area. Therefore, the square meterage of your home office compared to the total square meterage of the house. You can then claim the work expenses relating to your household based on this percentage.
Generally, you’ll determine this by calculating the area of your home office divided by the total area of your house and multiplied by the total cost of your premises (the amount that it takes to live there, e.g. the total amount on rent, rates and taxes, electricity etc.).
For example, if your home office is 10m2 and your house’s floor space is 100m2, you can potentially claim a tenth of your total costs of your premises.
What office expenses can I claim?
To claim tax for working from home, the expenses need to relate to your premises and directly influence your home office, such as:
- Rent or your bond
- Rates and taxes
- Cleaning costs
- Electricity and utilities
- Internet and phones
- Maintenance
Remember, you’ll need to prove these expenses, so keep all your slips, invoices and statements.
How do you claim?
If you’re eligible to claim home office expenses from your tax return, and you can provide the requirements as set out by SARS, you can claim against source code 4028 (Other Deductions) on your income tax return.
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Choose one of our tax-free investment solutions or speak to one of our financial planners about opening a retirement annuity to save without paying tax on your earnings.