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SALARY STRUCTURING FOR MAGISTRATES

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

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SALARY STRUCTURING FOR MAGISTRATES

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  1. SALARY STRUCTURING FOR MAGISTRATES Presented by DESMOND MAHAMU & KULANI DHUMAZI

  2. TOPICS • Composition • Composition Practical Example • Flexible Portion Options

  3. 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

  4. 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

  5. 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

  6. FLEXIBLE PORTION OPTIONS • Motor Car Allowance • 13th Cheque • Medical Assistance • Housing Allowance • Non-Pensionable Cash Allowance • Any combination

  7. 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 MOTOR CAR ALLOWANCE

  8. MOTOR CAR ALLOWANCE (CONTINUES) Use actual figures (vehicle limited to R360,000)Actual km’s & deemed cost per kmDeemed figures (private:18,000km & business:14,000)

  9. 13TH CHEQUE • Annual payment in Birth Month • Fully taxable • Option to spread tax over a year

  10. 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

  11. MEDICAL ASSISTANCE (CONTINUES) If excluded from structure, but contributes to medical scheme;- tax benefit: Annual deduction per prescribed capped rates

  12. HOUSING ALLOWANCE • Any amount decided by employee • No tax benefit, fully taxable • Does not give an advantage when applying for housing loan

  13. NON-PENSIONABLE CASH ALLOWANCE • Accommodate remaining on Flexible Portion • Fully Taxable

  14. Q & A

  15. HA KHENSATHANK YOU DESMOND: 082 372 8748KULANI: 073 448 6923

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