Tag: performance bonus

As South African companies prepare for a new year and the return of employees to the office following the festive season break, the matter of attracting and retaining top talent is gaining increasing prominence. Faced with a challenging local and global economy and a pervasive scarce skills challenge, companies are seeking new measures and tools to help them recruit, motivate and engage their employees.

As a result of the COVID-19 pandemic, the current business environment can truly be defined as volatile, uncertain, complex and ambiguous (VUCA) – a constant state of flux. No business is immune to these factors, regardless of size or industry.

As the year quickly draws to a close, we have been inundated with queries regarding their expected annual bonuses in December. Many of the enquiries stem from employees who don’t know if their bonus constitutes a thirteenth cheque or a performance bonus.

Not everything you hear about tax is true. There are many myths and misconceptions about payroll tax in South Africa that simply won’t go away. Let’s look at a few of them and what the tax and labour laws actually say. No matter whether your employer calls what it pays you a salary, overtime or commission, it is taxed at the same rate on the payroll according to the standard PAYE tax tables.

The short answer: if payment of a bonus is a guaranteed right, either in terms of an employee’s contract of employment, an employer’s remuneration or bonus policy, or perhaps an industry regulated Bargaining Council Main Agreement, and the bonus is not dependent on the exercise of any discretion at the instance of the employer or the attainment of individual or company related performance objectives, then...