Home Office Deduction for a Sole Proprietor in South Africa
Short answer: A sole proprietor can claim part of the costs of a home office when the space is used for the business. SARS's published home office rules are written for employees, so a registered tax practitioner should confirm the right share for you.
Check before you rely on this: SARS's Interpretation Note 28 deals with employees and office holders. We did not find a SARS page that sets a fixed percentage or method for sole proprietors, so the general deduction rules apply and the split between private and business use is your judgement, which you should be able to defend.
What SARS says about the rules
Home office costs are generally looked at under the general deduction rules in section 11 of the Income Tax Act, together with the limits in section 23. For employees SARS sets strict tests, such as the room being regularly and exclusively used for work and specially equipped for it. Those employee tests do not apply to you in the same way, because you are not an employee.
Working out a fair business share
A common approach is to take the floor area used for the business as a share of the whole home, and apply it to costs such as rent or bond interest, rates, electricity and cleaning. Write down how you measured it, and use the same method every year.
Keep your proof
Keep the rent, bond statements, municipal bills and any other invoices for five years from the date you submit the return.
How OptiTax does this on WhatsApp
- Send each utility bill and invoice to WhatsApp so it is filed with the date and amount.
- Ask for your tax estimate to see the effect of what you have entered.
- Use "find anything" to pull a document back up when you need it.
Frequently asked questions
Can I claim my whole rent?
Only the business share. The rest is private.
Does a spare room used as a desk count?
It helps if the space is used for the business and kept for that purpose. Ask a tax practitioner about your exact setup.
What if I am salaried and run a side business?
Different rules can apply to each source of income. Read our employee home office page or ask a practitioner.
Sources
Related guides
General information, not tax advice. Check your own situation with SARS or a registered tax practitioner.