There are two options you can choose from when deciding on a package to provide your employee with.
· A total-cost-to-company package; and
· A Salary-plus-benefits package
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When looking at this package, you must consider the following:
· You must specify what exactly the package includes. This will be medical aid, pension etc.
· How will the salary be paid? Will it be monthly?
· What will happen if one of the variables change? For example, what will happen if medical aid premiums go up?
· If and when the employee can change the structure of the package and to what extent.
If you're thinking about this package, then you'll need to determine if there are any non-salary items that you'll treat as remuneration.
· Payments in kind for accommodation and food. A payment in kind is any item or right that you provide an employee with for his services;
· Car allowances;
· Standby allowances; and so on.
Remember that regardless of which package you choose, you should confirm with your employee that you may make any deductions where required by law. This includes UIF, PAYE or specific agreements.
So, there are some practical points to keep in mind before drafting anything with regard to remuneration in your employment contracts.
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