I am a government employee contributing towards the GEPF. I and the employer make contributions based on my pensionable salary which is 70% of my total cost to company. I contribute 7. 5% and my employer contributes 13% of my pensionable salary. Under the new streamlined retirement savings dispensation, I want to know the per annum value of my remaining tax deductable allowance, should I choose to contribute towards a RA in addition to my current GEPF contributions.
You can contribute up to 27,5% of your taxable income (capped at R350,000 per year) limited of course to your actual contributions made. The 27,5% would apply to the sum of all your pension and RA contributions.
Per the new laws effective 1 March 2016, your employers contribution would be included in your income and taxed as a fringe benefit however it would be deemed to have been made by you and therefore included in the calculation of your deduction.
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