Can I deduct salaries I pay from my unrelated salary for income tax purposes?
By Alicia Human · Updated
Hi, I have a quick question, I am a permanent employee of a company and earn a monthly salary from which I pay medical, pension and pension fund, all deducted straight from my salary. I in turn have two people employed by me on a permanent casual basis, they are paid roughly R2500 each per month, could I get a tax deductions for this?
Please clarify the nature of the employment of these two people -Is it related to your permanent salaried job or something separate? Who pays them?
It is not related to my permanent job - the salaries are for a domestic worker and a salary for a small business which I am currently setting up as a sole trader, the business however does not make any profit yet and everything gets paid out of my own pocket for now as it is just starting out.
You would only be able to claim this expenditure once the business is trading and generating a profit. You cannot offset it against other unrelated income (e.g. your salary). You can only claim businesses expenses directly incurred in generating income - therefore the two employees need to be actively involved in your business in order for their salaries to be claimable.
Thank you for your assistance
Only a pleasure!