So you have finally completed your studies, and will be starting your new job soon. First of all, congratulations! In terms of salary there are some prerequisite deductions.
Here’s what you need to know:
UIF – The employer is legally required to deduct unemployment insurance, of 1% from your salary. This is paid into an account at the Department of Labour to provide for you financially should you be out of work. Furthermore, the employer should contribute 1% of your salary to the fund as well.
Income Tax – All South African citizens earning over R5500 per month are required to pay income tax to the South African Revenue Service (SARS). The more you earn, the more income tax has to be paid.
Other deductions – These may include payments for company benefits such as medical aid, provident fund, company vehicle, parking etc. If you have damaged any property of the company, they may deduct money from your salary to cover these expenses.
All these deductions may seem a bit overwhelming at first, but should you be out of work, your current UIF contribution will help you pay your bills. Taxes paid to SARS are used to run the country, grow the economy, develop infrastructure and more. These are probably the only two deductions you’ll have from your first salary, except if you have other benefits or caused damage to company property.
