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Calculating leave days payment

Posted 29 May 2019 under Tax Q&A

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Viola says:
29 May 2019 at 12:05

How do we calculate leave days for payment purposes? For example, if someone who has a monthly basic salary of R17933.00 and has carryover leave days of 20. We want to pay out the carryover leave days. The employee works 40hours per week. We also have employees who are working 37.5 hours per week not 40 hours. So, if one worked 37.50 hours per week, with the same basic of R17933.00 and had 20 leave days to be paid, how would you calculate?

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TaxTim TaxTim says:
29 May 2019 at 14:21

Kindly note that '21.67' is the average number of working days per month and its used to work out the rate per day. It doesn't matter how many hours are worked - the calculation should not be different.

Also, please refer to the following calculation when calculating leave pay:

Gross monthly salary divided by 21.67 multiplied by leave days

The calculation is as follows (as per the salary and leave days you have provided):

They will get approximately R16550.00 gross pay (R17933.00/21.67 X 20) i.e. before tax. This needs to be added to your salary and then will be taxed at your marginal rate of tax.

Please note this is an approximate calculation based on the figures which you have provided.

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