Home Office Deductions: What You Should Know for the 2025 Tax Season

Who Can Claim Home Office Expenses?

• Salaried employees who work more than 50% of their time from their home office.

• Individuals who earn more than 50% of income from commission or variable pay.

• Freelancers, sole proprietors, or company directors working from a home-based office.

What are the requirements?

The Income Tax Act states that a tax deduction for home office expenses will only be considered:

• If the room is regularly and exclusively used for the purposes of your trade, e.g. employment; and is specifically equipped for that purpose.

Therefore, the home office must therefore be set up solely for the purposes of your trade.

 A laptop on the dining room table doesn’t count.

AND

• For EMPLOYEES (remuneration consists only of a salary and similar remuneration), your duties must be mainly performed in this part of the home.

 It therefore means you must perform more than 50% of your duties in your home office.

OR

• For COMISSION EARMERS (more than 50% of your remuneration consists of commission or variable payments based on your work performance), more than 50% of those duties must be performed otherwise than in an office provided by your employer.

This means you must perform more than 50% of your duties away from your employer’s office.

Which Expenses Are Deductible?

Typical expenditures which are deductible are those closely linked to the premises:

• Rent of the premises (if you rent your home)

• Electricity

• Rates and taxes

• Repairs and maintenance relating to the office area

• Cleaning services

These expenses are typically apportioned (see more detail below).

Other examples of expenses which may be deductible are:

• Depreciation of office equipment, furniture and fittings, computer equipment used for trade purposes and the repairs relating to these items.

• Internet and telephone (business portion only)

Note: Interest on your mortgage bond is no longer deductible for salaried individuals or officeholders. This was clarified by SARS and applies to the 2025 tax season.

How to Calculate the Deduction

You’ll need to calculate the portion of your home used for business, using this formula:

Office area (m²) ÷ Total home area (m²) = Deductible percentage

Example: If your office is 10m² in a 100m² home, you can claim 10% of your eligible household expenses.

Remember that only expenses relating to the premises must be apportioned based on floor area (for example, rent, rates and taxes, cleaning, etc.).

Expenses that are not in connection with the premises (such as wear and tear on equipment and furniture used for trade purposes) do not need to be apportioned based on floor area. It is possible to claim 100% of these expenses as home office expenses.

Very Important: Remember to keep supporting documents: utility bills, lease agreements, floor plans, and photos of your office.

What to Watch Out For

Here are the most common mistakes we see each tax season:

• Claiming shared spaces like a lounge or dining room.

• Overestimating the qualifying expenditures.

• Failing to apportion and calculate the deduction correctly.

• Not having the correct supporting documentation when SARS requests it.

• Forgetting the CGT (Capital Gain Tax) impact—claiming a home office may affect your capital gains exemption if you own your property.
  
  

Upon the sale of the home, the overall capital gain or loss will need to be apportioned based on the portion of your home being used as a home office and the period that the part was used as a home office.

Act Early – Avoid Auto-Assessment Pitfalls

SARS is again issuing auto-assessments, but these typically exclude home office deductions. If you qualify, it’s worth filing manually—or with professional guidance—to avoid losing out.