You are Here > YouTube Channel > Video: Understand the total package

Video: Understand the total package

Nov 16, 2018

If you are starting a new job or considering a change, you need to understand the implications of your new package.

Most employment contracts are done on a “cost to company” basis which includes things like medical aid, retirement funds, housing and travel allowance.

Depending on the types of benefits and how they are taxed, the same “cost to company” offer from two different employers may result in a different take-home pay.

You may leave an existing employer for a bigger “package” only to find out that your take-home pay remains the same.

However you also need to review the benefits. For example: one job offers a take-home pay of R30 000 whilst another only R27 000. In the first scenario, the company has no retirement or medical aid benefits whilst the second company contributes towards a retirement fund and life cover. If you had to provide for retirement and life cover from your R30 000 take-home pay you may find that the lower take-home pay scenario is actually more beneficial.

So how do you compare payslips?

  • Ask for a mock payslip to give you an indication of what you will be getting in your pocket. This will also help you understand the tax implications of any fringe benefits.
  • Try quantify the benefits offered by the new employer. These could include preferential mortgage rates, discounts on products, lower insurance premiums, buying at cost price, or low or no banking fees.
  • If offered a 13th cheque, this may come out of your cost-to-company package which means that your annual salary is actually divided into 13 paycheques.
  • Once you start with a new company, make sure that you check your first payslip. Is everything on there as it should be? If you do not understand an item on you payslip ask the HR department to explain.

Make your package work for you.

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Maya Fisher-French author of Money Questions Answered

Previous Articles

Video: Set goals for money success

The key to achieving our money goals is to use psychology to set us up for success. When it comes to our money goals, behavioural economist Erik Vermeulen says we need to set specific long-term goals, but also have built-in intermediate success measures to make our...

Video: Investing in bitcoin

Whenever we see a surge in the price of bitcoin, I get a lot of queries from people asking how they can invest. The problem is that people are lured by the prospect of high returns rather than actually understanding what they are investing in. A sure way of telling...

Video: Understand your electricity bill

The cost of electricity will increase by 15% in April. That is triple the rate of inflation which means a bigger portion of our budget will go to paying for electricity. It is worth taking the time to understand how your electricity is charged for and to find ways to...

Video: The true cost of cashing in your pension

Do you know the true future cost of cashing in your pension? The long-term consequences are not reversible and will leave many financially destitute when it comes to retirement. This video, as part of a member education series for the Government Employees’ Pension...

Video: How to grow your side hustle

In any crisis there is opportunity. Lockdown created new market opportunities as customers became open to trying new brands through e-commerce. Research has already identified that post lockdown, people are less likely to return to major shopping centres, preferring...

Video: Make Sure You Receive Your Retirement Benefits On Time

As you enter retirement, one of your biggest risks is a delay between when you receive your final salary and the first payment from your pension. This video, as part of a member education series for the Government Employees’ Pension Fund (GEPF), explains what you need...

Video: Changes to provident funds

On 1 March 2021 the Taxation Laws Amendment Bill of 2020 came into effect. It contains changes that have a direct impact on the members of provident funds. These changes are part of a process to simplify the retirement fund industry and bring provident funds in line...

Video: How to stick to your money resolutions

Why is it so hard to stick to our New Year resolutions? We know that if we want to lose weight we need to eat less and exercise more. To grow wealth we must spend less and save more. So why then do we give in and buy the chocolate bar when we purchase our groceries,...

Video: No early pension access for GEPF members

Members of the Government Employees’ Pension Fund (GEPF) can not “borrow” or withdraw from their retirement savings. Cashing in your pension is “stealing” from your future self! This video, as part of a member education series, explains why GEPF members should not be...

Pin It on Pinterest

Share This