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Salary Structuring for Magistrates - Options and Practical Examples

This presentation by Desmond Mahamu and Kulani Dhumazi explores the salary structuring for magistrates, detailing components such as basic salary, state contributions to the GEPF, and flexible portion options. The composition of the package is analyzed with practical examples, demonstrating how to calculate basic salary, state contributions, and flexible portions. Options available for the flexible portion include motor car allowances, 13th cheques, medical assistance, and housing allowances. Understanding these structures allows magistrates to optimize their remuneration while adhering to tax regulations.

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Salary Structuring for Magistrates - Options and Practical Examples

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  1. SALARY STRUCTURING FOR MAGISTRATES Presented by DESMOND MAHAMU & KULANI DHUMAZI

  2. TOPICS • Composition • Composition Practical Example • Flexible Portion Options

  3. COMPOSITION • Basic Salary, State’s Contribution to GEPF & Flexible Portion • Basic Salary = 60% x Total Package • States Contribution to GEPF = 13% x Basic Salary • Basic + States GEPF Contribution = 67.8% of Total Package • Flexible Portion = 32.2% of Total Package

  4. COMPOSITION PRACTICAL EXAMPLE • Grade JE, Pay Level 1 package of R758,574 structured: • Basic (60%) = R455,144.40 • State’s Contribution (13%) = R59,168.77 • Flexible Portion (32.2%) = R244,260.83

  5. REMINDER!!!!!!!!!!EVERY MAN IS ENTITLED TO ORDER HIS AFFAIRS TO REDUCE THE AMOUNT OF TAX PAYABLE BY HIM-IRC V DUKE OF WESTMINSTER [1936] AC 1

  6. FLEXIBLE PORTION OPTIONS • Motor Car Allowance • 13th Cheque • Medical Assistance • Housing Allowance • Non-Pensionable Cash Allowance • Any combination

  7. 25% of total package (max) • Employee must own car & avail for business use • Tax benefit: 60% subject to PAYE, Monthly, Increases Net Amount • Must determine official business travel expenditure MOTOR CAR ALLOWANCE

  8. MOTOR CAR ALLOWANCE (CONTINUES) Use actual figures (vehicle limited to R360,000)Actual km’s & deemed cost per kmDeemed figures (private:18,000km & business:14,000)

  9. 13TH CHEQUE • Annual payment in Birth Month • Fully taxable • Option to spread tax over a year

  10. Not obliged to include in structure • Taxed fully as fringe benefit if included in structure • Benefit is when contribution exceeds; • R570 , if no dependants • R1,140, member plus 1 dependant • R1,485 plus R345 for additional dependants MEDICAL ASSISTANCE

  11. MEDICAL ASSISTANCE (CONTINUES) If excluded from structure, but contributes to medical scheme;- tax benefit: Annual deduction per prescribed capped rates

  12. HOUSING ALLOWANCE • Any amount decided by employee • No tax benefit, fully taxable • Does not give an advantage when applying for housing loan

  13. NON-PENSIONABLE CASH ALLOWANCE • Accommodate remaining on Flexible Portion • Fully Taxable

  14. Q & A

  15. HA KHENSATHANK YOU DESMOND: 082 372 8748KULANI: 073 448 6923

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