Understanding Your Remuneration Package
It is very important to understand you remuneration package also known as the ‘cost to company’. Few people understand the cost to company package. Different companies offer different remuneration packages. We will discuss a remuneration package that has a basic salary, cost to company package and additional benefits.
Basic salary
This is the cash aspect which is usually payslips or earnings. You will find different items in this section like your basic salary, car allowance, housing allowance, cellphone allowance, etc. All these items are paid in cash before deductions. After all the deductions have come off of your salary, the amount of cash deposited into your account is your nett salary.
However, remember this is not your total remuneration package.
Cost to Company Package and additional benefits
This is everything that you cost the company, in addition to your basic salary. These benefits could be pension/provident fund, medical aid, group life, funeral cover, disability cover, etc. This section could also include 13th cheque, overtime and commission, performance bonus, petrol card, company car and company cellphone.
We will look at a few of these examples of cost to company packages.
1 Pension/Provident fund/Medical Aid/Group Life/Funeral Cover:
You should add the amount the company contributes to the following benefits. Companies usually pay a portion and you pay a portion. Your portion is taken out of your basic salary so the company only needs to add their portion. This will show in the deductions column on your payslip. However, if the company pays for any of these benefits in full there will be no deductions in the deduction column.
2 13th Cheque:
A 13th cheque is a bonus that an employee can expect if it is part of their employment contract. If you are guaranteed a 13th cheque, it needs to be added.
3 Company Car:
If you have a company car with a full maintenance plan, tyres replaced when needed, etc. You still need to do your research to determine what it would have costed you if that car was yours then compare these calculations. You need to base your calculations on the exact same car. This needs to be added.
Additional benefits
There are additional benefits that are not guaranteed and do not have fixed values. The amounts and times you receives these benefits can differ. These benefits that differ need to be listed under additional benefits.
1 Petrol Card/Petrol paid per kilometre:
If you have a fixed amount you can spend on petrol a month regardless of whether is it business of personal use then it is considered a guaranteed benefit and will fall under the cost to company. However, if the amount varies every month then it will be listed under additional benefits.
2 Performance Bonus:
A performance bonus can vary in amount which is why it falls under additional benefits. You need to add up the value of the bonus(es) you have received over the last year and prove that you received them by way of payslips.
3 Company Cellphone:
If you have a work phone that you can use for business calls and private calls then your full amount can be added to the cost of company package. However, if you are only allowed to make business call then you need to put it under additional benefits.
4 Paid ADSL Line/Laptop:
Majority of companies these days’ supply their employees with laptops so they can work from home. Sometimes companies will pay for the ADSL line which you will put under additional benefits.
5 Overtime:
If you are not required to work outside business hours, you will not get overtime. However, if your job requires you to work overtime you will list it under additional benefits.
6 Commission:
This is never included in cost to company package. Your commission depends on where you work. You will list your cost of company benefits and just say plus commission and put in brackets the value of the commission you earned.
The responsibility is on you to understand your remuneration package and payslip. If you do not understand anything or are unsure of anything, go to your HR manager and ask them to explain it to you. Alternatively you can ask your recruitment consultant or prospective employer for a dummy payslip.