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Can I deduct salaries I pay from my unrelated salary for income tax purposes?

Posted 26 May 2016 under Tax Questions



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Michael says:
25 May 2016 at 16:00

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?

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TaxTimTaxTim says:
26 May 2016 at 10:35

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?


Michael says:
26 May 2016 at 10:53

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.


TaxTimTaxTim says:
26 May 2016 at 13:11

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.


Michael says:
26 May 2016 at 13:46

Thank you for your assistance


TaxTimTaxTim says:
26 May 2016 at 13:48

Only a pleasure!


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