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Portion of retirement annuity contribution gets coded as 3808, why?

Posted 13 July 2016 under Tax Questions



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Johann says:
13 July 2016 at 11:32

Last year my employer added a RA to our benefits. The deal was that the employee pays 5% of salary towards the RA and the Employer would pay 7% to total of 12% of salary towards RA. On this years IRP5 there is a big amount listed as code 3808 (Payment of Employee Debt if the policy is owned by the employee) and it seems that this amount equates to the 7% portion that the employer paid. This has a negative effect on my returns as it seems that I now get penalised by SARS for this amount. Should the entire 12% not be codes as 4006 for RA ?

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TaxTimTaxTim says:
13 July 2016 at 12:50

You are right, your employer needs to add the 12% together and this contribution should reflect under code 4006 on your IRP5.


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