Opaido · Wiki · Topic
Pay components
Earnings, allowances, deductions and fringe benefits that make up an employee pay structure.
Basic salary Basic salary is the fixed, recurring portion of an employee's pay before allowances, overtime, bonuses or deductions are added or subtracted.Bonus A bonus is a discretionary or contractual lump-sum payment, such as an annual or performance bonus, that is fully taxable and often annualised for PAYE purposes.Commission Commission is variable pay calculated as a percentage of sales or output, fully taxable through PAYE and typically annualised because it fluctuates period to period.Fringe benefit A fringe benefit is a non-cash benefit an employer provides, such as use of a company car or low-interest loan, taxed via PAYE on a value SARS prescribes for that benefit type.Medical aid contribution A medical aid contribution is the employee and employer payment toward a registered medical scheme, generating a Medical Tax Credit that reduces PAYE rather than taxable income.Overtime pay Overtime pay is the premium-rate compensation owed to qualifying employees for hours worked beyond their ordinary daily or weekly hours, set by the Basic Conditions of Employment Act.Pension fund contribution A pension fund contribution is the employee and employer payment into an employer-sponsored pension fund, deductible from taxable income up to a shared cap with other retirement contributions.Retirement annuity contribution A retirement annuity contribution is an employee's payment into a personal retirement annuity, deductible from taxable income up to a SARS-set percentage cap.Severance pay Severance pay is the statutory minimum payment owed to an employee dismissed for operational requirements, taxed under a tax directive rather than ordinary PAYE.Taxable allowance A taxable allowance is a regular payment on top of basic salary, such as a cellphone or housing allowance, that is fully included in taxable income for PAYE purposes.Travel allowance A travel allowance is a recurring payment toward an employee's business travel costs that SARS includes in taxable income at a reduced rate, reconciled against actual business kilometres at year end.
