Tax for a commission earner who may deduct business expenses.
Net after tax
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Taxable income
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Tax due
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Your breakdown
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The one test that decides whether you can deduct your costs
Commission earners sit in an unusual spot in South African tax. Most salaried employees cannot deduct the costs of earning their pay, but if you live on commission, SARS opens a door that ordinary employees do not get. The whole thing turns on a single test: is more than half of your total remuneration made up of commission? If yes, you may deduct the genuine business expenses you incurred to earn that commission, the way a small business would. If commission is half or less of your pay, that door stays shut and your expenses are not deductible against employment income. This calculator applies the test for you and then taxes the result on the income scale.
What you can write off, and what you cannot
When you pass the over-half test, the deductible costs are the real expenses of generating commission: business travel and vehicle running costs for client visits, a portion of your home office, telephone and data, entertainment of clients, and similar. They must be genuine, incurred to earn the commission, and backed by records. What you cannot do is invent round numbers or deduct private spending dressed up as business. SARS scrutinises commission expense claims closely and can disallow anything you cannot prove with a logbook, invoices, or contracts. After expenses come off, the remaining taxable income runs through the seven-band progressive scale less your age rebate, using the bands and rebate this calculator applies for 2025/26, which you should confirm with SARS.
R600,000 of pay, two thirds commission
Picture a salesperson on the default figures: R600,000 of total income, of which R400,000 is commission, with R50,000 of genuine business expenses, aged under 65. Commission is R400,000 of R600,000, comfortably over half, so the expenses are deductible.
Without the deduction, tax on the full R600,000 would be R135,632, so the R50,000 of expenses saves R18,000 in tax. That is the deduction working at a 36 percent marginal rate, the band this income reaches. The lesson is concrete: every rand of legitimate, documented expense is worth your marginal rate back, which is why meticulous record-keeping pays a commission earner far more than it costs. Notice too that the saving is not the full R50,000. The expense reduces taxable income, not tax directly, so its value is the expense multiplied by your marginal rate. A common error is to assume a R50,000 expense puts R50,000 back in your pocket; here it returns R18,000, still a strong reason to track every qualifying cost, but a smaller figure than many people expect.
The provisional tax obligation people overlook
A practical warning that catches many commission earners off guard: if a large share of your income is commission rather than a fixed salary, you may be a provisional taxpayer. That means filing two provisional returns a year and paying tax in advance, on top of any PAYE your employer withholds, with penalties and interest if you underestimate. It is wise to set aside a portion of every commission cheque for tax rather than spending the gross. The other common mistake is failing the over-half test by a whisker in a slow year. Your salary stays fixed but your commission dips, commission slips below half of pay, and suddenly the same expenses you deducted last year are disallowed. The deductibility is tested each year, so it can switch on and off.
What records does SARS expect for commission expense claims?
Keep a detailed logbook for any vehicle claim showing business versus private kilometres, plus invoices, receipts, and contracts for every other expense. SARS can request these on assessment, and a claim without supporting documents is routinely disallowed. Hold the records for at least five years from the date you file.
My commission is exactly half my pay. Can I deduct expenses?
No. The rule requires commission to be more than half of total remuneration, so exactly 50 percent does not qualify. You need to be over the line, not on it. In a borderline year, the difference between 49 and 51 percent commission changes whether your expenses are deductible at all.