Claiming business expenses is not just allowed—it’s smart. When done right, it lowers your tax bill and keeps more money in your business. However, you need to know what counts and keep good records. That’s how business expense deductions South Africa allows can work in your favour. Let’s break it down.
1. Start with the Basics: What Business Expenses Can You Deduct?
To begin, you can only claim expenses that help you earn income. These must not be personal or long-term capital costs.
Here’s what you can include:
- Rent, salaries, electricity, phone, and internet.
- Marketing, bank charges, and vehicle costs (but keep a logbook).
- Depreciation on assets like equipment or furniture.
On the other hand, don’t claim personal items unless you can clearly show they were for business use.
2. Business Expense Deductions South Africa: Home Office and Mixed-Use Costs
If you work from home, that doesn’t mean you lose out. You can still claim part of your home expenses. But only if the space is used just for work.
Here’s what you should know:
- Make sure your home office is a separate, dedicated area.
- Work out what percentage of your home is used for work (based on floor size).
- Then apply that percentage to rent, water, electricity, and insurance.
Always keep your working-out and bills in case SARS asks later.
3. Don’t Forget Entertainment and Travel Expenses
Next, let’s talk about business travel and meals. These are often missed or done incorrectly. So here’s how to get them right.
You should:
- Keep a travel log with the date, trip purpose, location, and distance.
- Save receipts for petrol, accommodation, meals, and flights.
- For entertainment (like meals with clients), write down who attended and why.
Also, be extra careful—SARS often checks these claims closely.
4. Business Expense Deductions South Africa: Keep Every Record
Now that you’re claiming expenses, you need proof. SARS won’t accept guesses. They want to see real documents.
To stay safe:
- Save receipts, slips, invoices, and contracts.
- Use cloud-based software to track and sort expenses.
- Store copies digitally so nothing gets lost or faded.
Remember, keep everything for at least five years.
5. Get Help from a Pro to Maximise Your Business Expense Deductions South Africa
Finally, don’t do this alone. A tax practitioner can help you claim more—and avoid problems with SARS.
Here’s how they help:
- Meet with them during the year, not just at tax time.
- Ask about tricky expenses like clothing, phone use, or training.
- Buy business tools or assets before year-end to lower your tax bill.
With the right help, your business can stay compliant and still claim every legal rand.
Claiming business expense deductions South Africa allows is a smart move. Just know the rules, keep records, and ask for help when you’re unsure. That way, you’ll save money and avoid stress at tax time.
