SALARY STRUCTURING FOR

MAGISTRATES

Presented by

DESMOND MAHAMU & KULANI DHUMAZI

TOPICS Composition

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

R758,574 structured:

Basic (60%) = R455,144.40

State’s Contribution (13%) =

R59,168.77

Flexible Portion (32.2%) =

R244,260.83

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

13th 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

Use actual figures (vehicle

limited to R360,000)

Actual km’s & deemed cost

per km

Deemed figures

(private:18,000km &

business:14,000)

MOTOR CAR ALLOWANCE (CONTINUES)

13TH 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;

R570 , if no dependants

R1,140, member plus 1

dependant

R1,485 plus R345 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