Tax season: How to calculate home office expenses

This step-by-step guide will show you how to get the calculations right the first time around and make submitting your claim less stressful.

If you want to know if you qualify, read Tax season: Does your home office qualify?  If you’re still unsure what can be claimed as expenses, read Tax season: What home office expenses can be claimed?

Determining office space

The first step to calculating your home office expenses claim is to establish the amount of property space your office takes up.

• Floor space of house: You will need to calculate the total size of your home in square metres. If your home is rectangular in size, you will use the following equation:

Length (eg 20m) x Width (eg 10m)

= Area (200m²)

If your home has built-out areas, you will calculate those areas in the same way and add these up to make a total.

• Floor space of home office: You will need to calculate the total size of your home office in square metres in the same way you calculated the floor space of your home.

Length (eg 5m) x Width (eg 2m)

= Area (10m²)

Make sure to exclude any areas of the room (such as a cupboard) that are used for personal or home requirements.

Tip: You do not need to get a copy of the official plans of your home, but you do need to make an illustration of your property with the area dedicated to your home office highlighted. This will need to be submitted to the South African Revenue Service (SARS) as part of your claim.

Calculation of apportionment

As you don’t dedicate your whole home to work, you cannot claim your full home expenses as part of your home office deduction.

However, SARS does recognise that it is not property space alone that is required when working from home. For those qualifying expenses, like electricity costs, SARS works on a proportional calculation.  

• This calculation is based on the amount of space used by your home office.

Floor space of home (200m²) ÷ Floor space of office (eg 10m²)

= Apportionment (20%)

Calculation of deductions

Now is the time to add up the expenses that qualify for home office deductions like rent, repairs, rates and taxes and electricity.

• This is the formula to calculate how much of the total expenses you can claim under home office expenses.

Total qualifying expenses for the period (eg R50 000) x Apportionment (eg 20%)

= Apportioned home office expenses (eg R10 000)

Direct expenses

Expenses directly related to your home office are not calculated as a proportion of your home. These include office equipment and furniture as well as wear and tear allowances.

• These qualifying expenses are claimed in full and added to the apportioned home office expenses to reach a total claim.

Apportioned home office expenses (eg R10 000) + Direct home office expenses (R2 500)

= Total home office expenses claim (eg R25 000)

Tip: Remember to keep proof of all your expense payments for 5 years as you will need to submit these if you are audited.