How to structure your salary
to save you R1, 000’s
Here’s the problem most employers and employees encounter on a daily basis: Avoid being penalised by SARS for incorrect salary structuring.
Imagine a company pays a gross salary of R10,000 with medical contributions above the line of R1 500 and the medical aid company then increases its premium to R2 000, under the usual system of structuring salaries you would make a salary sacrifice of R500.
The medical aid rules effective from 1 March 2006 would require that the rebate (tax-free portion) can only be claimed in the month when the contribution is made. The new medical aid provisions would be a perfect opportunity to revise your company policies. The requirements for a legal salary sacrifice are still required!
But here’s our solution, as explained in the Practical Tax Loose Leaf … It’s simple – use a separate deduction!
You can have a separate deduction of R500 until your next review, when this amount would be included in your newly negotiated total employment cost to company.
As simple as that - and you’ve avoided a huge headache.
The salary structuring system we’d like to tell you about allows more leeway for you to structure salaries in the future without affecting your gross salary now.
For employers it means you will always know the exact cost to company of all your employees, making management decisions far easier in the future, especially when review time comes around again. We’ll reveal all to you in the Practical Tax Loose Leaf
Try our complete Tax Advisory Service risk-free for 14-days. As part of this service you’ll receive the Practical Tax Handbook, three Bonus Reports, Regular updates, the Weekly Tax Bulletin, Online access to past Tax Updates and a Tax Helpdesk.
What you’ll discover in the Practical Tax Loose Leaf. Order today!
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