The General Deduction Formula

With the filing season that started a while ago, with the deadline end of November 2010 for non-provisional tax payers (mostly salary and commission earners), I once again received similar questions regarding income tax deductions.

Here are a few important aspects when considering a deduction against a salary or commission earned.

Commission earners:

You may deduct Section 11a expenses against your income if your commission earned portion is more than 50% of your total income. These expenses include, but not limited, to the following:

1. Client entertainment

2. Motor vehicle expenses (Depreciation, fuel, repairs, Insurance, finance charges) Important: Without a logbook you need to calculate the private use on your vehicle. This used to be 2.5% of the cost price of your vehicle per month, but is proposed by SARS to be 3.5% per month. By keeping a proper logbook you may claim your actual business expenses.

The logbook can be done per hand – click here


With an electronic devise called tripTrack – click here

3. Membership fees

4. Home study (finance charges on your bond, rent paid, insurance, cleaner, security, levies) Important though, your study or room in your house needs to be exclusive for work. You may claim the expenses by the formula of the square meters of your study to the total square meters of your house.

5. Telephone / cell phone

6. Accounting fees

7. Travel & accommodation

8. Computer expenses

This list is some of the regular expenses and expenses are not limited to it.

The expenses below may also be claimed but are the only allowable deductions for salary earners.

Annuities – the greater of

• 15% of your total non-retirement funding income or

• R 3,500 less your current pension fund contributions or

• R 1,750

Pension – the greater of

• 7.5% of your retirement funding income or

• R 1,750

Medical expenses

• A capped amount of a medical scheme can be deducted per month per taxpayer and his/her dependants.

• All other expenses can be deducted above 7.5% of your taxable income

• Taxpayers above 65 years old or with disability (including his/her dependant) may claim all medical expenses.


Donations to certain registered Public Benefit Organisations may be deducted limited to 10% of taxable income

Travel Allowance

• Travel expenses may only be claimed when receiving a travel allowance and when actual business travelling occurs.

• From March 2010 you need to keep a proper logbook to be able to claim any expenses. Again, either by hand or with your electronic tripTrack - link

• Very important, travelling between your house and work is deemed private.

Company vehicle

• The benefit of having a company car is taxed at 3.5% per month on the cost price of that vehicle.

• The first 10,000 kilometres are deemed to private per year.

With a proper logbook that prove your private mileage to be less than the 10,000 kilometres per month you may claim that portion back in your tax return.

Yours in tax, Jasper Basson

TripTrack - order here