The 2020 worldwide lockdown has meant that the majority of the global workforce have had to work from home, and in the majority of cases, for the first time. Something that many employees were not prepared for, especially with their work-from-home office set-up.
Employees have had to relook at their work-from-home environment, while often working at a dining room or kitchen table, and make it more comfortable. But this is not suitable or sustainable solution.
In South Africa, there are claimable tax benefits for working from home. This article explores the tax benefits and how to claim these benefits when purchasing your work-from-home desk, chair and related office furniture.
Employees, both full time and commission-based, are able to claim tax rebates, based on the Income Tax Act for certain office expenses.
Tips for Claiming Tax Deductions for your home office
- Firstly, you need to be practising a “trade” – This can also be applicable to a person in employment – therefore being employed meets this criteria.
- Your home office must be equipped as an office to enable you to perform your work duties, meaning that it includes a computer, internet connection, printer, desk and chair, etc.
- The home office area must be regularly and exclusively used for work purposes – at the end of the day, once you have finished work, for example, the area should not be used as a family room.
- More than 50% of your work needs to be performed in the home office – this means that you are required work from home for at least six months of the tax year.
Tax deductions allowed for desks and other furniture
Deductions are allowed on the wear and tear on office equipment – SARS has specific depreciation rates on computer equipment and office furniture.
Because the Act states that you can only claim on a home office desk, chair, office furniture and office equipment if more than 50% of your employment time is spent in your home office, you need to work from home on average 2-3 days a week.
During lockdown, most people used their home office for 100% of their working hours. However, when they returned to work they could possibly now be working only two days a week from home. This could still translate into the person, on average, spending more than 50% of the time working from home during the tax year.
In order to comply, employees need to submit to SARS a letter from their employer to confirm that they are working from home, together with the necessary details. They should also retain invoices and statements of the associated expenses, and keep a running spreadsheet of days worked at home for the duration of the tax year.