Demand-ranked tax questions · Business · Question 02 of 20
Which business expenses are tax deductible in South Africa?
An expense is not deductible merely because the business paid it. In broad terms, it must be incurred in carrying on a trade and in producing income, and it must not be private or capital in nature unless a specific allowance applies. The facts, business purpose and evidence matter more than the account name.
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The points that decide the answer
- Common operating costs may include rent, wages, software, professional fees, advertising, bank charges and business insurance.
- Assets and improvements are usually dealt with through wear-and-tear or other capital allowances, not a full immediate deduction.
- Private portions of mixed expenses must be excluded or apportioned on a reasonable basis.
- A valid invoice and proof of payment help, but they do not convert a private or non-deductible item into a tax deduction.
A practical way to handle it
- Reconcile every expense account to source documents.
- Record the business purpose and period for unusual or mixed-use costs.
- Separate repairs from improvements and expenses from assets.
- Keep a tax adjustment schedule showing every amount added back or claimed.
Common mistakes
- Claiming personal groceries or family travel
- Expensing equipment that should be capitalised
- Using round estimates with no supporting schedule
What to keep on file
Supplier invoices, contracts, bank statements, proof of payment, mileage logs and apportionment calculations.
Source and scope
Based on current SARS guidance, reviewed on 28 August 2026. This is general information, not tax advice. Rates, thresholds and outcomes depend on the tax year and your facts. Regulated submissions and advice are handled through registered partners where required.
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