Wear and tear refers to the depreciation or decline in the value of tools or equipment over a period of time until they no longer have a value and require replacement.
The Income Tax Act provides for you, as a taxpayer, to claim wear and tear or depreciation on qualifying movable assets used in the production of your income in carrying on a trade.
This deduction can help offset the cost of equipment or technology you use while carrying on a trade, such as participating in the gig economy or providing a professional service, by reducing the taxable income you earn from those activities. You may claim for a sewing machine if you are dressmaker, a drill if you are handyman or a hairdryer if you are a hairdresser, for example.
As an individual taxpayer, this deduction applies even if you earn a fixed salary as you may still qualify for the deduction if you use specific tools or devices to earn income—such as a laptop or cellphone.
If you're renting out a furnished property, you can also claim wear and tear on the furniture made available to the tenant.
This wear-and-tear allowance is for moveable items and is separate from home office expenses. A tax deduction for home office expenses is more complex and requires that you have a dedicated space from which you work. You do not have to have this to claim the wear-and-tear allowance.
There are, however, quite a few rules around this deduction, however, of which you should be aware.
You can be an individual taxpayer or a business.
You must own the item and have paid for it yourself – you cannot claim for a work laptop that belongs to your employer.
You must have proof of your purchase of the item and its cost.
You must use the item regularly for work purposes, not just for your personal use.
If you use the item for private purposes as well as for work purposes, you must apportion the wear and tear cost between work and private use and deduct from your taxable income only the work-related portion of the depreciation.
The South African Revenue Service (SARS) has published a list of items and the write off periods you can use to determine your deduction as an annexure to its legal notes on the wear-and-tear allowance.
Here are some common examples of the tools and the periods over which they can be written off are:
If an item costs less than R7 000, you can deduct it in full in the tax year in which you bought it. The type of item you can claim for in one tax year should be one that functions on its own and does not form part of a set.
If an asset is not listed by SARS, the general rule for the allowance is that it is equal to the cost of the item written off over its expected useful life. If you are not sure of the time period to use, you should approach SARS for a ruling, since the allowance is at its discretion.
Note: If you sell an asset before the end of its useful life for more than its tax value, the difference between the sale price and the written-down value is treated as recouped wear-and-tear. In terms of the Income Tax Act, this amount must be added back to your taxable income in the year of sale.
Determine its useful-life years. When the period for which you have used the item is less than 12 months in a year of assessment, the deduction must be apportioned.
| WEAR-AND-TEAR DEDUCTION EXAMPLE
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This article was reviewed by the South African Institute of Taxation’s Tax Technical Team
You bought a R15 000 work laptop in June 2024. SARS allows a three-year write-off: