Wear and tear allowance

The fast answer: your wear and tear allowance under section 11(e) writes off the cost of business equipment over its useful life – and you choose the method. Enter what an asset cost, when you brought it into use, and how long SARS accepts it should be written off over, and the calculator returns your deduction for the year with the arithmetic on show. It handles both methods SARS allows – straight-line (an equal slice each year) and diminishing-value (a fixed percentage of the reducing balance) – because section 11(e) lets the taxpayer elect either one, with no statutory default and no SARS approval required.

Open the Wear and Tear calculator →

New to this? Read the Freelancer and side income tax guide first, which covers wear and tear alongside your other deductions. This page is the calculator.

What it calculates

Section 11(e) of the Income Tax Act allows a deduction for the amount by which the value of a qualifying asset has diminished through wear and tear during the year – your laptop, camera, tools, office furniture, the kit you actually use to earn your income. Instead of deducting the full cost in year one, you spread it over the asset's working life.

SARS sets out the mechanics in Interpretation Note 47 (Issue 5), dated 9 February 2021. The calculator applies three things from it:

• The cost. Generally what you paid for the asset, brought into use for purposes of trade.
• The write-off period. The Annexure to IN47 lists periods SARS accepts for common assets – for example computers over 3 years and furniture and fittings over 6 years. You can use these without asking, or motivate a different period.
• The method – your choice. This is the part most calculators get wrong by assuming straight-line is the only option.

The two methods, shown

Section 11(e) does not prescribe one method. The taxpayer may elect the straight-line method or the diminishing-value (reducing-balance) method – there is no statutory default and you do not need SARS approval to choose. The calculator does both so you can compare.

Straight-line: annual allowance = cost ÷ write-off period Diminishing-value: annual allowance = opening tax value × write-off rate

Straight-line deducts an equal amount each year. A R30,000 laptop over 3 years gives R10,000, R10,000, R10,000 – simple and even.

Diminishing-value applies a fixed percentage to the reducing balance, so the deduction is front-loaded: bigger early, tapering later. It never fully reaches zero on its own, which is why it suits assets that lose value fastest when new. The calculator shows the year-by-year balance so you can see the curve, not just trust it.

There's also a small-item shortcut IN47 allows: an asset costing less than R7,000 may be written off in full in the year you acquire it, rather than spread at all. The calculator flags when an item qualifies.

A worked example

Sipho buys a R30,000 laptop and brings it into use on the first day of the year. The IN47 write-off period for computers is 3 years. He compares the two methods.

Straight-line (cost ÷ period):

• Year 1: R30,000 ÷ 3 = R10,000
• Year 2: R10,000
• Year 3: R10,000 (fully written off)

Diminishing-value (at a 50% rate on the reducing balance):

• Year 1: 50% × R30,000 = R15,000 (balance R15,000)
• Year 2: 50% × R15,000 = R7,500 (balance R7,500)
• Year 3: 50% × R7,500 = R3,750 (balance R3,750)

Same asset, very different timing. Straight-line gives Sipho a steady R10,000 a year; diminishing-value gives him R15,000 in year one – useful if his income is high now and he wants the deduction sooner. Each R10,000 of allowance, at a 31% marginal rate, saves about R3,100 in tax. The calculator runs your real cost and period through both and lays out every year, so you can pick the method that fits – which is your right under section 11(e), not SARS's call.

New to this? Read the guide first

This page works out the number. For the wider picture – what counts as a qualifying asset, how wear and tear sits alongside your home office and other freelance deductions, and how it flows onto your ITR12 – read the Freelancer and side income tax guide. Then come back here to calculate it.