Many companies in South Africa offer Cost-to-Company salary structures, where an employee’s total cost of employment is calculated. This would only happen if you sign a basic + benefit salary structure. When employees sign a contract stipulating that they will receive a 50% medical aid contribution, they may assume that it is an additional amount on top of their salaries. A medical aid benefit, for example, may see the employer contributing 50% towards the benefit. The benefit deductions on the pay slip is usually the point of confusion. The Skills Development Levy (SDL) is also a company contribution that doesn’t impact your salary. UIF is the 2% of your salary whereby the company pays 1% and you pay 1% – the company contribution doesn’t come out of your pay regardless of your salary structure. The payslip consists of Earnings which includes your basic salary, overtime and any other earnings applicable Deductions which includes PAYE, UIF & any other deductions applicable Company Contributions which includes all company contributions as per your contract & Fringe Benefits which includes all relevant fringe benefits received by the employee. The salary codes on a pay slip are linked to statutory company contributions and company benefits that you may be contributing towards. Look at the salary codes, not your net pay It’s important to have a clear understanding of your salary structure and benefits before you join a company. It might look like your net pay is increasing, but a new employer’s medical aid benefit may cover two dependents whereas your former company’s medical aid benefit covered five dependants, for example, so the new offer reduces the individual’s net worth. The mistake employees make here is that they don’t take the time to understand the details of what the numbers entail. The ‘dummy’ pay slip should include an estimation of what you will be earning along with a detailed explanation. There are two types of pay slips – the pre-employment ‘dummy’ pay slip and monthly pay slips.
Many times, these queries stem from employees not understanding how their salaries and wages are structured, as well as uncertainty about salary codes. SAPA often receives queries about pay slips.
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