Remuneration is the total of what an employee receives in return for their work - salary, wages, allowances, bonuses, commission and the taxable value of fringe benefits. It is the legal starting point for the statutory deductions.
What it means
Tax law defines remuneration deliberately broadly, then sets out which portions are excluded or partially included for each charge. PAYE, UIF and SDL each take remuneration as their base but apply their own inclusions, exclusions and caps, so the same word can produce three slightly different bases.
Where it fits in
Gross remuneration is built up component by component in each pay run. From it, balance of remuneration and taxable income are derived for PAYE, while UIF and SDL apply their own rules and limits. The aggregate is reported to SARS on the EMP201 and EMP501 and per employee on the IRP5.
Key rules
- Defined broadly: salary, wages, allowances, bonuses, commission and taxable benefits.
- The common base for PAYE, UIF and SDL, though each applies its own adjustments.
- Certain amounts are included only in part - for example a portion of a travel allowance.
- Reported in aggregate to SARS and individually on the IRP5.
