The morphology, chemical composition and formation mechanism of non-metallic inclusions in magnetic alloy of Fe-Co-Ni-Cu-Al-Ti-Hf system were investigated. These alloys are used in manufacturing single-crystal permanent magnets. Modern methods for the identification of non-metallic inclusions, as well as computer simulation of the processes of their formation by Thermo Calc software were used in the work. It was found that studied alloy contains (Ti, Hf)S titanium and hafnium sulfides, (Ti, Hf)2SC titanium and hafnium carbosulfides, Ti2O2S titanium oxisulfide, HfO2 hafnium oxide, and Al2O3 aluminum oxide. No titanium and hafnium nitrides were found in the alloy. The bulk of nonmetallic inclusions are (Ti, Hf)2SC carbosulfides and (Ti, Hf)S sulfides. All carbides and many oxides are within carbosulfides and sulfides. When the sulfur content in the alloy is no more than 0.2%, and carbon content does not exceed 0.03%, carbosulfides are formed in the solidification range of the alloy and has an faceted compact form. If the sulfur content in the alloy becomes more than 0.2% and carbon content more than 0.03%, the carbosulfide formation begins before the alloy solidification or at the beginning stages of solidification. In this case, carbosulfides are dendritic and coarse. Such carbosulfides actively float in the solidified melt and often come to the surface of the castings. In this case, specific surface defects are formed in single-crystal magnets, which are called sulfide stains. All titanium and hafnium sulfides are formed at the lower part of solidification range and have elongated shape.