Commission Income Tax in the Income Tax Act

If you are a commission earner and meet certain requirements, you are allowed far greater tax benefits than a normal salaried taxpayerTaxpayers who earns commission income, and who’s commission income represents more than 50% of their total income, are allowed to deduct expenses and losses actually incurred in the production of income, provided such expenditure and losses are not of a capital nature, in terms of “section 11 (a) of the Income Tax Act.”

Allowable Deductions for Commission earning taxpayers are as follows:

  • Home Office Expenses
  • Entertainment
  • Travelling Expenses
  • Computer Consumables
  • Deemed Private Expenses.

Please follow the link below which will provide more clarity on the requirements for deducting the above expenses: https://showme.co.za/ballito/files/2015/11/11-Nov-2015-Commission-Earners-20152.pdf

NB! Taxpayers should bear in mind that SARS often challenges commission expenses, so it is advisable to keep accurate and complete records. So please retain all documentary proof.

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