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Pension Reform - Coming in effect 1 March 2016

By venettabronwyn…, 15 February, 2016

Hi Everyone

I was just wondering how are companies dealing with the pension reform on payroll.  I know that the software companies are or already have updated their payroll systems to take into account the changes in the legislation.  This only comes into effect on the 1 March 2016.

The company contribution to the pension fund is now added to your basic salary and deducted again as a tax deductible deduction. 

1.  This obviously has an effect on the pension calculation I would think?  A higher basic salary?

2.  What about overtime and shift allowances based on your basic salary?

3.  What happens in the case of wage earners?  There wages are increased with the company contribution to the pension fund which needs to be taxed and deducted again?  This pushes the employees wage up.

What are your thoughts on this?

Venetta


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