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Can you deduct expenses incurred in production of income when earning an hourly rate subject to PAYE

Posted 31 January 2015 under Tax Q&A


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Where you work on short term contract for an hourly rate and your "client" deducts employee tax from your earnings (following completion of a questionnaire), are you able to deduct expenses incurred in the production of that income - such as travel and subsistence?

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TaxTim TaxTim says:
1 February 2015 at 23:13

Yes you will provided you meet the test as an independent contractor.

Garth says:
2 February 2015 at 5:22

Thanks. And if you are not deemed an independent contractor and PAYE is deducted (under earnings code 3616), are you still able to deduct expenses incurred in the production of your earnings?

TaxTim TaxTim says:
3 February 2015 at 7:13

Yes, as long as the 3616 code is used you will be able to deduct other expenses. The test for PAYE deduction and actual independent contractors are slightly different, but if you are a true contractor then you can deduct these expenses.


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