Taxing Times at Home: Tax Implications of Remote Work and Home Offices in South Africa

Remote work has progressed from when the pandemic necessitated everyone to download Teams and learn how to mute their mics to a lasting reality for many South Africans. More professionals are working from home full-time or following a hybrid work schedule.

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This evolving work landscape increasingly raises questions about paying the taxman. Which expenses can you deduct from tax? What records should you keep? And how do you stay compliant with SARS?

Here’s a practical guide for employees, freelancers, and small business owners navigating home office tax rules.

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1. Who qualifies for a home office deduction?

Not everyone working from their dining room table can claim tax back. SARS has specific requirements:

• Employees can only claim a home office deduction if they spend more than 50% of their working hours working from home.

• Commission earners and freelancers who generate more than 50% of their income from variable earnings may qualify more easily, provided they use a dedicated space.

• The space must be a separately defined room (not just the lounge or bedroom corner), used exclusively and regularly for work purposes.

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2. What expenses are deductible?

If you meet the requirements, SARS allows you to claim certain expenses linked to your home office. These fall into two categories:

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A. Direct costs

These refer to expenses that forthrightly link to the home office, such as repairs or purchases for this area – e.g., painting the office walls or fixing a window in that room.

Equipment (like a laptop or printer) cannot usually be claimed under home office expenses if your employer provided them. However, items you purchase yourself may qualify as capital expenses with wear-and-tear allowances.

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B. Pro rata share of household costs

These are expenses that only partially apply to the home office area, e.g.:

• Rent or interest on a bond

• Rates and taxes

• Utilities like electricity and water

• Cleaning costs

The calculation for these costs is based on the office area as a percentage of the total home area (e.g., a 12m² study in a 120m² home = 10%). That percentage is then applied to shared expenses.

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3. What does not qualify?

Unfortunately, not everything you use for work is seen as a tax-deductible expense in the eyes of the revenue service. These include:

• Office furniture or décor that is not strictly for work use. (We know you need that couch in the study, but SARS may disagree.)

• Data and cellphone contracts in your personal name, unless directly connected to generating income.

• Occasional or partial work-from-home setups (like using your dining table).

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4. Record-keeping requirements

SARS scrutinises home office claims carefully, so documentation is essential. Keep:

• A floor plan or measurements of your home and office space

• Invoices and receipts for all expenses (e.g., utilities, cleaning, or repairs)

• Employment contracts or letters confirming remote work arrangements

• A log of the percentage of time spent working from home (especially for hybrid workers)

Remember: claims must be supported by evidence if SARS requests it. Without proper records, deductions are unlikely to be allowed.

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5. Clever compliance considerations

You should ask yourself if tax deductions are worth it, especially when considering the following:

• While deductions can reduce taxable income, they may also affect your primary residence capital gains tax (CGT) exclusion when selling your home. If a portion of your home was used as an office, that portion may not qualify for the R2 million CGT exemption.

• Weigh up whether the deduction meaningfully lowers your tax in a way that justifies the admin hours you spend on tax claims. If you can use those hours to earn more than you save, it may be time to reconsider claiming.  

Too taxing for you? We can help!

Remote and hybrid work bring flexibility, but also complexity when it comes to tax. Planning ahead, keeping solid records, and seeking professional advice can help ensure you stay compliant while maximising your benefits.

At Huysamen Westraad Inc., we help individuals and businesses navigate the finer points of South African tax law. If you are working from home and wondering what you can claim, our team can provide the “remote control” – i.e., help you make sense of how your remote work impacts your taxes. Get in touch!