When you run a business whether you’re a sole proprietorship, freelancer, content creator, or private limited you can legally reduce your tax by claiming certain business expenses.
These are called tax-deductible expenses.
They lower your taxable income so that you pay less tax.
Let’s break it down properly.
✅ 1. Business Operating Expenses (Fully Deductible)
These are expenses required to run your business:
- Rent for business premises
- Office supplies
- Printing & stationery
- Software subscriptions (Canva, Adobe, accounting tools)
- Advertising & marketing
- Social media ads
- Website hosting & domain
- Bank charges
- Business telephone & WiFi
- Accounting and bookkeeping fees
- Business insurance
- Courier & shipping costs
- Repairs & maintenance of business assets
✅ 2. Vehicle & Travel Expenses (If Used for Business)
You can deduct:
- Fuel
- Car repairs
- Car insurance
- Licence & registration
- Wear & tear (depreciation)
- Travel costs (using logbook)
Important:
You must keep a SARS logbook of business kilometers.
If your car is used for both personal and business travel, you can only claim the business portion.
✅ 3. Home Office Expenses (If You Qualify)
You can deduct part of:
- Rent
- Bond interest
- Water & electricity
- Rates & taxes
- Home insurance
- Cleaning
- Fibre/WiFi
Rules:
- You MUST have a dedicated office space used only for work.
- You must earn more than 50% of your income from home.
- You must calculate the office space % based on square meters.
✅ 4. Equipment & Assets (Depreciation / Wear & Tear)
You can claim wear-and-tear or full deduction depending on the asset:
- Laptop
- Camera
- Phone
- Printers
- Furniture
- Tools
- Machinery
For example:
- A laptop depreciates over 3 years
- A cell phone over 2 years
- A camera over 5 years
✅ 5. Employee & Contractor Costs
These are fully deductible:
- Salaries
- Wages
- PAYE contributions
- UIF employer contributions
- Payments to freelancers or contractors
- Training costs
✅ 6. Professional & Compliance Fees
You can deduct:
- CIPC annual returns
- SARS practitioner fees
- COIDA/LOGS fees
- Legal fees
- Consulting fees
- B-BBEE certificate fees
✅ 7. Bad Debts (If You Use Accrual Accounting)
If a client owes you money and will never pay, you can claim it as a deduction.
NOT Deductible (Common Mistakes)
People often try to claim these but SARS does NOT allow them:
- Personal groceries
- Clothing (unless branded uniform)
- Haircuts (unless for actors/models)
- Personal entertainment
- School fees
- Personal loan repayments
- Your own salary (if sole proprietor)
- Traffic fines
Most Important Rule:
To Claim an Expense, It Must Be
“Incurred in the production of income.”
Meaning:
It must help you earn money.
AND
You must have proof
- Receipt
- Invoice
- Bank statement
If you can’t prove it, SARS will remove it.
Final Thoughts
Understanding what’s deductible can save you thousands in tax every year.
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