It’s something you may get every month but often you don’t really look at it.
All you’re likely to be interested in is that amount of money in your bank account. But understanding your payslip is vital, as it is one the most important pieces of paper in your life.
Without it, you’ll have a hard time applying for credit, a phone contract, a home loan or a rental agreement. And if any of the details on your payslip are incorrect, it could be seen as a fake.
Here’s what you need to know about that all-important document.
All payslips look a bit different but the details on them are mostly the same.
Yours should contain:
· Your employer’s name and address
· Your name and surname, ID number, job title and staff code or employment number
· The period for which payment is made
· Your total salary or wages
· The payment rate and specific payment if you worked overtime or, for example, on a public holiday
· All deductions
· Your nett pay.
Cost to company
This term refers to your total salary package and includes all employee benefits – for example, your and the company’s contributions to a pension fund.
It’s the amount the employer spends on you as an employee in total, with all benefits included and before any deductions.
It’s therefore much higher than your take-home pay.
It’s often the amount that comes with job offers, so keep in mind it’s your total package but not your nett pay.
This refers to what you earn without benefits or bonuses.
This is how much you earn before deductions.
This is also called your take-home pay. It’s the cash amount you get paid minus all deductions.
These are benefits given to you over and above your basic salary – for example, a travel allowance. You usually pay tax on these benefits.
Your employer can make deductions only with your consent or if they are legally obliged to do so.
Apart from legal deductions such as PAYE, UIF or any deductions by court order, other typical deductions are for retirement fund and medical aid contributions, union subscriptions, and if you
agreed to life or funeral insurance.
Pay as you earn (PAYE)
This is the tax your employer must deduct from your income and pay to the Sars monthly.
The amount of PAYE you pay depends on how much you earn and it’s calculated using tax rates issued by Sars.
You can check on sars.gov.za in which tax bracket you fall and how much you should contribute.
Unemployment insurance fund (UIF)
UIF provides financial support if you become unemployed or are unable to work because of maternity leave, adoption leave, or long-term illness.
You can only claim if you and your employer contributed to the fund.
The contribution is in total 2% of your remuneration – you and your employer each contribute 1%.
It doesn’t apply if you work less than 24 hours a month, are a public servant, if you are retired and get a monthly state pension, or if you only earn commission.
Your employer can make deductions to pay your creditors if there is a court order. The deductions may not exceed 25% of your remuneration.
Skills Development Levy (SDL)
This is an amount employers must pay to encourage learning and development in South Africa. The employer’s contribution is usually calculated as 1% of the employee’s remuneration, but there is no employee contribution portion.
This tax certificate is issued to salaried employees at the end of each tax year. A tax year runs from 1
March to 28 February.
The IRP5 details all your earnings and the tax that was deducted from your salary each month and was paid over to Sars during the year.
You need this document to file an annual tax return.