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What is the home office tax booster?
In an ever-increasing digitalized world, employees around the world are more and more encouraged to use remote working arrangements to carry out their employment duties - also to avoid unproductive and ecological wasteful time during their commute to the office. It further serves as a way of reducing employee inequality, particularly for South African employees who often cannot afford to live close to the (expensive) office area or even afford a car or public transportation.
From a tax point of view, expenses incurred with working from home are traditionally considered personal expenses and thus not tax-deductible. However, the South African Income Tax Act allows for the deduction of home office expenditure under certain strict conditions. These mainly depend on your employment status and work arrangements but are accessible to a very wide range of individuals, including desk-bound staff.
Once you qualify, and in short, most expenses incurred for the home office will qualify as a tax deduction (e.g. portions of the rent/ mortgage you pay) and can lead to substantial tax savings on assessment, up to appr. 5% of your total rental/ bond costs per annum, of course depending on your individual circumstances and whether you pay tax or not.
Creative CFO can help you determine whether you already qualify for this tax benefit or what we can do, together with your employer, to introduce such benefits to all employees so you can benefit from this huge tax saving.
Should you qualify, book your assessment with our Tax Expert by checking out below.
Ask our Tax Expert about how we can help execute this home office tax saving by filing your annual income tax.