If my gross salary is R14000. And the employer now decides to join a pension fund and will contribute 5% and the other 5% will be a deduction from the employee. How much is the taxable income now? Does it stay R14000 since the R700 now becomes part of the employees income and will be deducted before tax? and the employees contribution is just a normal deduction and not tax deductible?
It depends on what the company wishes to do in terms of the Cost to Company. However if the R14 000 is the CTC then the R700 will come off that and you will be taxed on R13 300 as the employer contribution is not taxable at present.
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