Most effective way to structure my salary.

Riaan says:
8 September 2015 at 10:28


Is there any Good way to structure My salary for best benefit? according to my paye document and questions answered

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TaxTim TaxTim says:
8 September 2015 at 10:48

By using allowances which will provide tax benefits, yes your salary can be structured accordingly.

The best tax benefit is a housing allowance, where only 2/3 of the allowance is taxed. However the allowance should match your current mortgage bond or rental agreement. The other is contributions made to a pension, provident, preservation or study policy fund. The policy premiums are deductible for tax purposes, but also limited to a total of N$40,000 per annum.

Other allowance include vehicle allowance, cell phone allowance, S&T allowances, entertainment allowance, which can all be taxed on a %. I.e. 50% of the allowance is taxed monthly.

Please bear warning that if allowance are not taxed 100%, then you will have to retain proof of expenditure incurred for the respective allowance and should then be claimed with the submission of your annual tax return. This may become an administrative burden. If no expenses are claimed against the allowances, then additional tax may be payable at the end of the year.

Please also note the allowance and salary structuring will also be subject to the remuneration policies of your employer.

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