HOW GOOD IS YOUR SALARY STRUCTURING?

fhbc_august_01_11In tough economic times Employers are under pressure to give salary increases to Employees.  The question then arises:  What can Employers do to pay Employees better instead of just more?  Part of the answer lies in the structuring of packages for Employees.  Is it flexible?  Does it meet the personal financial need of the Employee?  On the other side Employers may pay for “benefits” or allowances which the Employees do not need.  The result is that Employers might pay hard-earned money for benefits which Employees don’t not value.

It is time to do the Round Table on Salary Structuring:

Is it legal?
Yes, on 30th November 2015 the Supreme Court of Appeal made it clear in a ruling that it is absolutely legal to structure remuneration and allow salary sacrifices.  But:  Yes, a big BUT:  The principle was confirmed, but written agreements and policies are compulsory.  With no ambiguity, the SCA made it clear that no oral evidence will be accepted and only correct executed documentation will proof the actual legitimacy.

What is flexible then?
Items that can be considered includes retirement funding, group life, disability, income protection, funeral cover, employee vehicle insurance, company vehicles, medical aid, gap cover, etc.

Did you know?
If you have employees earning less than R600 000 per annum that pay children’s or relatives school or higher education fees they can qualify for bursaries meaning that it is possible that the Employer can pay these fees instead of the Employee, once again, if it is agreed in writing and according to the Employer’s policies.

Want to know more?
Talk to us for a holistic approach, Anél Crous for the policies and documentation, Petri Westraadt for the tax allowances and benefits, Louise-Anne Truter for the Payroll execution.