Question:
I have resigned from the company that I've been with for 8 years. How do I go forth to get my provident fund with MIBFA paid out to me? How much does SARS deduct for tax and how long will the provident fund take to pay out?
Answer:
Chantel, Rather than going forth, you should go first to your HR department and request an exit or withdrawal instruction form, which you must complete and return to HR, together with any required supporting documentation (eg copy of your ID and proof of banking details). It will take anything between 4 and 16 weeks to effect the pay-out, provided your tax affairs are in order. SARS will deduct tax per the withdrawal lump sum tax table: assuming you have not previously withdrawn from another retirement fund, the first R22 500 will not be taxed, the balance to R600 000 will be taxed at 18%, the balance to R900 000 at 27% and the remainder at 36%. If you preserve your savings in a preservation fund or by transferring to your new employer's fund, you pay no tax at this stage.
For information about preserving your provident fund capital, read more here.
Or, if you would prefer, speak to a consultant about the benefits of a preservation fund.
