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Tax Write-Offs: Can Salaries and Benefits Count as Tax Deductions?

Updated: Feb 4, 2022

If you answered yes, you got it right! Small business owners with employees can write off their workers’ salaries, benefits, and vacation pay on their business tax returns. This also includes regular wages, commissions, and bonuses.

  • Percentage deductible: 100%

  • Eligibility:

    • The employee(s) must not be the sole proprietor, a partner, or an LLC member.

    • The salaries and benefits must be considered reasonable, ordinary, and necessary.

    • The salaries and benefits must have been paid in the year in which the taxpayer claims the deduction.

  • Example deductions:

    • Employee salaries

    • Employee paid time off

    • Employee commission and bonuses

Check out the link below for a list of other tax deductions you can claim this tax season!

What questions do you have about tax season? We are here to provide help with tax preparation, accounting, payroll management, and business formation! R&I Tax and Bookkeeping is here to help! You may contact us via our 'Contact' page at We can also be reached via phone at 253-777-1106.


Osterhaus, E. (2021, February 1). Complete list of small business tax deductions (2021). QuickBooks. Retrieved December 16, 2021, from



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