The Ultimate Small Business Tax Deduction Cheat Sheet: 20+ Expenses You Shouldn’t Miss

Running a small business in South Africa comes with its share of financial challenges, but understanding and leveraging tax deductions can ease the burden. Claiming eligible deductions helps reduce your taxable income, ensuring you pay only what’s necessary. As Biz Evolution, an accounting firm dedicated to helping businesses thrive, we’ve compiled a cheat sheet of over 20 expenses you shouldn’t overlook

1. Home Office Expenses

If you run your business from home, you may be eligible to deduct a portion of your home-related expenses. This includes rent or bond repayments, electricity, internet, water, and even security costs. The deduction is calculated based on the percentage of your home used for business purposes.

2. Business Insurance

Premiums paid for business-related insurance policies, such as professional indemnity insurance, general liability, and asset insurance, are tax-deductible.

3. Travel and Vehicle Expenses

If you use your car for business purposes, the fuel, maintenance, insurance, and a portion of depreciation are deductible. Keep accurate records of business mileage versus personal mileage to claim the correct deduction.

4. Advertising and Marketing Costs

Costs associated with advertising your business—whether it’s social media ads, print advertising, or promotional material—are fully deductible.

5. Employee Salaries and Wages

Payments made to employees, including salaries, wages, bonuses, and contributions to pension or provident funds, are tax-deductible. This also applies to the contributions your business makes towards unemployment insurance and other statutory obligations.

6. Training and Development

Investing in employee training and development? The costs of accredited courses, workshops, and certifications can be deducted.

7. Professional Fees

Fees paid to professionals for business services, such as accountants, auditors, legal advisors, and consultants, are deductible.

8. Depreciation on Assets

Assets such as machinery, equipment, and vehicles lose value over time. Depreciation allows you to spread the cost of these assets over their useful lives, and this annual deduction can significantly lower your taxable income.

9. Rental Expenses

If you lease office or retail space, the rent and utilities associated with the space are fully tax-deductible.

10. Telecommunications

The costs of business-related phone lines, internet services, and mobile data can be claimed as a deduction.

11. Office Supplies

Paper, printer cartridges, pens, and other office supplies that are directly related to your business operations are deductible.

12. Bank Charges

Fees charged by your bank for business-related accounts and transactions are deductible.

13. Repairs and Maintenance

Expenses for maintaining or repairing business property or equipment, including painting, servicing machines, or fixing electrical issues, can be claimed.

14. Bad Debts

If your business extends credit to clients and they fail to pay, you may deduct these bad debts, provided you’ve made reasonable attempts to recover them.

15. Legal Fees

Fees incurred for business-related legal matters, such as contract reviews, dispute resolutions, or court cases, are tax-deductible.

16. Software and Subscriptions

If your business relies on software or cloud-based services, such as accounting software or digital marketing tools, these subscription costs are deductible.

17. Interest on Business Loans

Interest paid on business loans, such as loans taken out to purchase equipment, property, or finance day-to-day operations, is deductible.

18. Donations to Charity

Donations made to registered Public Benefit Organisations (PBOs) are deductible, up to 10% of your taxable income. Keep the Section 18A certificate for proof.

19. Work-Related Education

If you’re paying for courses, seminars, or certifications that help you improve your skills or knowledge for business purposes, the costs are deductible.

20. Health and Safety Equipment

Investing in workplace safety equipment, such as fire extinguishers, personal protective equipment (PPE), and ergonomic furniture, can be claimed as a deduction.

21. Foreign Exchange Losses

If your business engages in international transactions and incurs losses due to fluctuations in foreign exchange rates, these losses can be deducted.

22. Utilities and Municipal Fees

Water, electricity, and waste management services used for business purposes are tax-deductible.

23. Meals and Entertainment (with Restrictions)

While meals with clients and entertainment for employees can be deductible, the South African Revenue Service (SARS) has specific guidelines. Be sure to document the business purpose of these expenses.

24. Subscriptions to Professional Bodies

Membership fees paid to industry-specific organisations or professional bodies are deductible.

Conclusion

Maximizing tax deductions can make a world of difference for small businesses, allowing you to reinvest those savings into your growth. Keeping meticulous records and ensuring that all claims are legitimate is essential for avoiding issues with SARS. If you’re unsure about which expenses qualify or how to claim them, consult with Biz Evolution for expert guidance. We’re here to ensure your business thrives, while also helping you navigate South Africa’s complex tax landscape.

By claiming these 20+ expenses, you can reduce your tax liability and keep your hard-earned profits working for you!