Insights
Benefits and allowances inside a package
Every component of a package has its own tax rule, and those rules decide how much of the employer's rand the employee actually feels.
Cash allowances
Travel allowances are taxed on a prescribed portion each month with the final position settled on assessment against a logbook. Subsistence allowances are exempt within daily limits. Most other allowances are fully taxable.
Funded benefits
Retirement and medical benefits split into employee and employer portions. The employee portion reduces pay and may reduce tax; the employer portion adds cost and may itself be a taxable fringe benefit — see benefits and allowances.
Non-cash fringe benefits
Company cars, employer-provided accommodation and low-interest loans are valued under prescribed rules and taxed even though no money changes hands. Employees are frequently surprised by the PAYE impact of a company vehicle.
Frequently asked questions
Is a travel allowance worth taking?
It depends on genuine business travel and whether a logbook is maintained. Without business kilometres, an allowance is simply taxable cash with extra administration.
Does a company car reduce my take-home pay?
It increases taxable income through the fringe benefit value, so PAYE rises and net pay falls even though the benefit itself has real value.
Are employer medical contributions taxed?
Employer contributions to a medical scheme are generally treated as a taxable fringe benefit for the employee, with medical scheme fees tax credits then reducing tax payable.
Patuza reviews component-level tax treatment across your payroll.
Book a consultationRelated services
- Employee benefits administration →
Medical aid, retirement funds, group risk and allowances administered through payroll.
- Payroll processing →
Monthly and weekly payroll processing, calculations, payslips and statutory deductions.
Related topics
- Benefits & allowances →
Travel, cellphone, medical, retirement and other package components and their treatment.
- Package structure →
Structuring packages: guaranteed pay, variable pay, benefits and flexible components.
- PAYE →
Pay-As-You-Earn: how employees' tax is calculated, withheld, declared and paid to SARS.
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How to read a cost-to-company offer and compare it fairly against another.
- Remuneration structuring guide →
Structuring packages for value and compliance.