Question:
Hi there, Please help me out, there's a deduction of risk benefits on my pay slip. Can you please explain what that money is for and do I claim it when I resign? Can my employer deduct my provident fund contribution from my salary and not put it on my pay slip? Many thanks, Hlengiwe
Answer:
Hlengiwe,
Risk benefits typically cover life assurance, disability benefits and funeral cover. This is insurance and only pays out in the event you pass away, or you are unable to work anymore, or you or someone in your family passes away (for the funeral cover). So if you never get to claim any of these benefits, you should count your blessings. There is no pay-out when you leave, although some funds provide for a continuation benefit, which means you can take the risk cover with you when you leave (but you have to pay the risk premiums it in your own name from then on).
Provident fund contributions are typically made by the employer, as the Income Tax Act only allows the employer to deduct provident fund contributions. These contributions are then usually structured as a so-called salary sacrifice. This means your official salary is reduced, to offset the provident fund contribution made by your employer on your behalf. Your payslip will therefore not show a deduction, just a lower income. But the payslip should show - and aggregate - the contributions made on your behalf during the tax year.
