Deductions | South Africa Tax Guide 2006

Employee deductions are limited to the following:

• Business travel deduction against car allowance
• Certain medical expenses
• Contributions to pension and retirement funds
• Donations to certain public benefit organisations
• Specific expenditure against allowances of holders of public office
• Wear and tear allowances on equipment.

The following currently represent certain standard deductions which may be utilised by taxpayers-

Medical expenses :  For taxpayers under 65 years of age, this deduction is limited to expenditure (including contributions) which exceeds 7.5% of taxable income.

For taxpayers over 65 years of age, there are no limitations and all expenses are deductible. Where the taxpayers qualifies as a "handicapped person", the taxpayer may deduct all qualifying medical expenditure in excess of R500 for the year.

Current pension fund contributions: This deduction is limited to the greater of R1 750 or 7.5% of remuneration from retirement funding employment.

Current retirement annuity fund contributions: This deduction is limited to the greater of 15% of taxable income from non-retirement funding employment, R1750 or R3 500 less Pension Fund contributions.