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07 June 2004 – Removal of the Telephone Allowance by SARS
How can you still benefit from a telephone allowance?

The formal Telephone Allowance, as we knew it over the past number of years, does not exist anymore for people who mainly earn a salary and can not be used as a deduction against your taxable income. A telephone allowance can now only be deducted if your income consists mainly of commission income.

You may then ask how can I still benefit if you earn a salary? The answer is very simple. To utilize the Telephone Allowance, one needs to talk to your employer to restructure your salary package NOT to include any telephone allowance, and not to add it to the cash component of your salary either.

The South African Revenue Service only allows the deduction of telephone expenses, as a tax deductible business expense for a business or if you earn mainly commission as income. SARS does allow employee telephone expenses to be deducted by a business on a reimbursement basis. This means that you can incur telephone expenses for your employer’s business purposes and claim it from your employer, who can refund you and then can claim it as a tax deduction. The easiest way to accomplish this, if for example you receive a cellphone from your employer, which you can use for business purposes.

If you also use your home telephone for work purposes, you can reach an agreement with your employer on the amount what you can claim per month or the total amount for the year or what type of calls you can claim and is your employer prepared to make a contribution towards the monthly line rental.

Don’t cut your nose to spoil your face, by trying to claim your total monthly home telephone bill. Play it safe and only claim your genuine business calls, not calls like calls to your partner’s parents on a Sunday or your calls to book your annual vacation.