The way we work has changed significantly since the onset of the COVID-19 pandemic, with many employers opting to adopt a hybrid working model. As such, as an employee, you may have had to work from home, or will work from home, more regularly and may have incurred (or will incur) additional expenses to run your home office.
For purposes of filing your annual income tax returns to the South African Revenue Service (SARS) you may want to assess whether you are, or will be, permitted to claim certain of these expenses as a tax deduction in your income tax return. It is important to note that the fact that you worked from home for at least six months during a given tax year does not necessarily mean that you will be entitled to claim a tax deduction for the home office expenses that you have incurred. The Income Tax Act, 58 of 1962 (Income Tax Act), sets out rigid requirements that must be met before employees can claim a tax deduction for home office expenses, and there will be no relaxation of these tax rules because of COVID-19. The provisions in the Income Tax Act that allow employees to claim a tax deduction for home office expenses are not new in our law, nor are they COVID-19 tax relief measures. Many employees have simply not previously made use of these provisions as they mainly worked from their employers’ premises.
In this article, we provide a brief overview of the requirements that need to be met by salaried employees (i.e. employees other than commission earners and independent contractors) to qualify for a tax deduction for home office expenses, the types of expenses that can be deducted, the manner in which to disclose the tax deduction on your income tax return and the types of supporting documents that SARS may request to substantiate the deduction.