Kindly take note of the information below. We received the following question from one of our members:
Each year, as is legally allowed, I sell R1800 worth of leave directly into my pension. This is tax free. Not quite sure why, but this needs to be done for the end of the tax year i.e. I need to apply for this before salary closing for end February. I sell leave each year at this time, and last year, I just made it in time before we were told no more leave to be sold. Do you know of any allowance for this? (Question shortened)
The only way to find out is to apply and see if they grant the selling of your leave. It is a term and condition of employment to sell leave and you are entitled to do so. If they refuse forward me the correspondence and I will take it from there.
AND FROM OUR PENSION FUND EXPERT, FRED DANIEL
Tax rules allow you to pay two different additional amounts into your SABC pension fund tax free. The R1800 you refer to, is called “Arrear pension”. Whatever the reason for its inclusion, the fact is you can make use of this. You also do not have to make use of your leave for this, neither do you have to pay it in a single amount. You can have it deducted from your salary on a monthly basis as I do, at R150 pm.
The second amount will probably be even larger if you decide to make use of this. We are allowed tax free contributions to normal (not arrear) pension contributions of 7.5% of our basic salary. The SABC deducts only 6% which means we can if we prefer to, pay in an additional 1.5%. You can, as I do, also have this deducted from your salary on a monthly basis.
You can by the way, also deposit further amounts into your pension but these will not be tax free. The Pension Fund Rules makes provision for these additional payments.
HR will be able to advise you how to request additional deductions.
Just be aware that on your annual pension fund statement, the percentage you are given as expected pension upon retirement at normal retirement age, does NOT reflect your additional contributions including the demutulisation and surplus amounts. These are reflected on the statement but not taken into consideration for calculation of your expected pension. Your pension will therefore be higher than the percentage mentioned on your statement.