2020 saw a huge number of employees reducing contributions to their Retirement Fund and adjusting their Medical Aid Plans where possible, all in an attempt to stay afloat and make ends meet by increasing their take home pay. When the dust settles there will be consequences to this – are you and your employees aware of them and are you ready to deal with them ?.
Both of these strategies result in a reduction in tax benefits and an increase in take home pay – in the short term, but unfortunately pose a longer term risk. They also however require short and medium term changes in the payroll.
Did you, or will you be offering financial assistance in terms of a low-interest loans to be paid back over time, or are you going to write off certain employee debt? If so, bear in mind that there are tax implications?
Businesses and Payroll Managers will shortly be dealing with the fallout of this “take-home pay increase” strategy and will need to be prepared to provide assistance and correct advice to employees.
Don’t miss out on the Payroll Managers Tax Year End Virtual Seminar where we will unpack the 2021 Budget in detail, do comparative tax calculations between this year and last year, and prepare Business Owners and Payroll Managers for the various scenarios facing employees this coming year.