Salary Structure

Pho3nix

Pho3nix

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OK, I've looked this up but Google isn't being much help. Is this how salary structuring works?

A(Gross Salary) - (Internet + Cell + Travel + Rent) = B(Gross salary)
B - Tax = Nett salary?

Don't have an HR department :p and my tax guy is all the way in PTA. Can anyone explain how and why structuring your salary is beneficial ?
 
It used to be that you only got taxed on a portion of your "Perks", but I believe most of those loopholes have been closed.
 
You get some tax-deductible allowances that can be worked into your salary. As Icarium says though, most loopholes have been closed and you now only have a few items you can possibly deduct as a salaried worker.
 
Messugga said:
You get some tax-deductible allowances that can be worked into your salary. As Icarium says though, most loopholes have been closed and you now only have a few items you can possibly deduct as a salaried worker.
Click to expand...

Makes sense. Do Contractors work around different "rule" around their tax deductibles?
 
Pho3nix said:
Makes sense. Do Contractors work around different "rule" around their tax deductibles?
Click to expand...

In short, yes. Your tax guy can explain the tricks to you, but if you have a home office, get a travel allowance or have similar expenses, there is some room to manoeuvre.
 
Messugga said:
In short, yes. Your tax guy can explain the tricks to you, but if you have a home office, get a travel allowance or have similar expenses, there is some room to manoeuvre.
Click to expand...

The definition of a contractor was also changed: the only 'true' contractors are electricians, plumbers etc.
 
A lot of companies use SARS approved tax "breaks". Some people are lucky enough to have the pension / provident fund taken off before tax, therefore being taxed on a smaller amount of cash.
 
Pho3nix said:
OK, I've looked this up but Google isn't being much help. Is this how salary structuring works?

A(Gross Salary) - (Internet + Cell + Travel + Rent) = B(Gross salary)
B - Tax = Nett salary?

Don't have an HR department :p and my tax guy is all the way in PTA. Can anyone explain how and why structuring your salary is beneficial ?
Click to expand...

Depends on what type of worker you are. If you pay the internet or cell yourself and is only used for work then you could probably deduct a part of it.

Generally it's
Taxable income = Gross Salary - (pension contrib + medical aid credit ) + fringe benefits
PAYE = Taxable income for month * (percentage from tax tables)
Income = Gross - PAYE - (other deductions)
 
rrh said:
The definition of a contractor was also changed: the only 'true' contractors are electricians, plumbers etc.
Click to expand...

I am learning the hardway :(

Due to this, I moved to salary, first time I earned a salary EVER :p
 
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