You've found the perfect candidate and you need to make him an offer he can't refuse. And the cost to company (CTC) package seems perfect.
But wait, how sure are you that you're structuring the package correctly?
Turn to your HR Handbook and look at the principles of CTC and how you can make it work for you.
Click here now…
With CTC, you'll lower your employees' PAYE by making 50% of the contributions to retirement funds as company contribution
(which isn't taxable in your employees' hands).
Just remember that the rules of the fund match your payroll and company retirement policy.
Because if you don't, you'll be on the wrong side of the tax
and financial services board law.
Retirement annuities are payments you make, but your employees pay tax
This is unfair when you look at pension/provident fund members.
Now, instead of making the payment yourself, you can deduct these contributions from your employees' pay.
But just remember that there's a limit of 15% of the amount he gets during the year from non-pensionable pay.
There all 3 tax
benefits for your employees to contribute to retirement annuities…
57 ready-to-use contracts, policies and forms for every employee situation
The Industrial Relations Toolkit
provides instant access to downloadable employment contracts, policies and forms
– all approved and checked by qualified labour consultants. It's your own DIY Industrial Relations Toolkit
at your fingertips which will save you oodles of valuable time and thousands in consultant fees.
Get it now
Contributions are tax
Investment returns are tax
Tax on benefits is on a favourable basis.
In other words, tax
on lump-sum benefits is on a sliding scale with a portion of the benefit tax
Medical aid funds:
Many of the rules that apply to medical aid no longer apply to CTC.
Now your employees can cover anyone they like. This is of course as long as they can afford it and that the rules of the fund allow for it.
*To learn the finer details of what has been covered in the above, simply turn to chapter C 17: Cost to Company
in your Practical Guide to Human Resources Management
If you don't already have this source, then what are you waiting for?
Find all the advice you could ever need, regarding, Human Resources Management, in one place!
and order your copy today…