How to Calculate Depreciation for SARS in South Africa
Learn how to calculate depreciation (wear and tear) for tax purposes in South Africa. SARS-accepted rates, methods, and Section 11(e) requirements.
Step-by-Step Guide
Identify the asset and its cost
Record the total cost of the asset including VAT (if you're not a VAT vendor) and installation costs. This is the depreciable amount. Land is not depreciable.
Determine the SARS useful life
SARS publishes accepted useful life periods: computers (3 years), office furniture (6 years), motor vehicles (5 years), machinery (4 years), software (2 years). You may use a different period if you can justify it.
Choose the method
SARS allows the straight-line method for Section 11(e) wear and tear. Annual depreciation = cost ÷ useful life. For example: R60,000 computer ÷ 3 years = R20,000 per year deduction.
Apply the deduction
Claim the annual depreciation as a deduction on your tax return. In the year of acquisition, the deduction is pro-rated based on the number of months the asset was used. Assets must be used for trade purposes.
Free Tool
Depreciation Calculator
Calculate asset depreciation using straight-line, declining balance or sum-of-years-digits methods.
Frequently Asked Questions
What depreciation method does SARS accept?
Over how many years do I depreciate a computer?
Can I claim full depreciation in the year of purchase?
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