SALARY STRUCTURING FOR MAGISTRATES Presented by DESMOND MAHAMU
SALARY STRUCTURING FOR MAGISTRATES Presented by DESMOND MAHAMU & KULANI DHUMAZI
TOPICS § Composition Practical Example § Flexible Portion Options
COMPOSITION § Basic Salary, State’s Contribution to GEPF & Flexible Portion § Basic Salary = 60% x Total Package § States Contribution to GEPF = 13% x Basic Salary § Basic + States GEPF Contribution = 67. 8% of Total Package § Flexible Portion = 32. 2% of Total Package
COMPOSITION PRACTICAL EXAMPLE § Grade JE, Pay Level 1 package of R 758, 574 structured: § Basic (60%) = R 455, 144. 40 § State’s Contribution (13%) = R 59, 168. 77 § Flexible Portion (32. 2%) = R 244, 260. 83
REMINDER!!!!! EVERY MAN IS ENTITLED TO ORDER HIS AFFAIRS TO REDUCE THE AMOUNT OF TAX PAYABLE BY HIM -IRC V DUKE OF WESTMINSTER [1936] AC 1
FLEXIBLE PORTION OPTIONS § Motor Car Allowance § 13 th Cheque § Medical Assistance § Housing Allowance § Non-Pensionable Cash Allowance § Any combination
MOTOR CAR ALLOWANCE § 25% of total package (max) § Employee must own car & avail for business use § Tax benefit: 60% subject to PAYE, Monthly, Increases Net Amount § Must determine official business travel expenditure
MOTOR CAR ALLOWANCE (CONTINUES) § Use actual figures (vehicle limited to R 360, 000) Actual km’s & deemed cost per km Deemed figures (private: 18, 000 km & business: 14, 000)
13 TH CHEQUE § Annual payment in Birth Month § Fully taxable § Option to spread tax over a year
MEDICAL ASSISTANCE § Not obliged to include in structure § Taxed fully as fringe benefit if included in structure § Benefit is when contribution exceeds; § R 570 , if no dependants § R 1, 140, member plus 1 dependant § R 1, 485 plus R 345 for additional dependants
MEDICAL ASSISTANCE (CONTINUES) § If excluded from structure, but contributes to medical scheme; - tax benefit: Annual deduction per prescribed capped rates
HOUSING ALLOWANCE § Any amount decided by employee § No tax benefit, fully taxable § Does not give an advantage when applying for housing loan
NON-PENSIONABLE CASH ALLOWANCE § Accommodate remaining on Flexible Portion § Fully Taxable
Q&A
HA KHENSA THANK YOU DESMOND: 082 372 8748 KULANI: 073 448 6923
- Slides: 15