LEGAL MATTERS BY RAINE ST.CLAIRE
Bonuses, leave, overtime and tax 5 misconceptions and myths – what you should be aware of
A
s the year-end and holidays approach, many workers look forward not only to a well-deserved rest but also to the possibility of receiving a bonus. For those fortunate enough to receive some extra payment, you may be wondering about the tax implications and how much of it you can actually enjoy and spend. And what about those unlucky not to receive a bonus, are they entitled to any type of bonus?
South Africa’s payroll tax is plagued by persistent misconceptions and myths about variable remuneration—bonuses, overtime pay, commission, and leave pay. It is essential to exercise caution and be informed, as not everything you believe or have heard about tax deductions is true. We look at some of the most common misconceptions and myths, providing clarification based on what the tax and labour laws actually state.
58 | Public Sector Leaders | December 2023/ January 2024
THE MISUNDERSTANDING ABOUT BONUSES A discretionary bonus is an additional payment given at the management’s discretion, typically as a gesture of appreciation for an employee’s efforts. It is usually not guaranteed and can vary widely. In contrast, a performance bonus is typically awarded to employees based on predetermined criteria or the overall performance of the company. These bonuses, linked to factors like meeting production
