In this article, Muhammed Goolab, Executive Committee Member of the South African Reward Association (SARA), answers frequently asked questions about your pay:
Why do my friends get paid more than me if we do the same work
Several factors determine individual pay levels. Some industries pay more for a specific skill or may even pay a premium for skills that they place more value on.
A company’s financial performance, as well as the individual’s performance, can also contribute to different salaries for the same skill.
How do I get more cash out of my salary?
Most organisations in South Africa offer Cost to Company packages, which indicates the total direct and indirect (e.g. pension and medical aid benefits) pay that an employee receives in a year.
Cost to Company packages generally allows employees to adjust some of the benefits of their package, such as pension fund and medical aid contributions.
Lowering your contributions can lead to more cash in your pocket each month, but employees who do this often sacrifice some of the benefits that they were contributing towards.
It is important to understand the benefits that you want to receive and make sure you are making an appropriate contribution towards your retirement and healthcare each month.
Why is my salary increase less than the medical aid increase?
The drivers that determine salary increases within a business are different from the drivers behind medical aid increases.
Medical aid inflation is defined as the annual increase in claims received by medical schemes and has generally increases greater than CPI.
This is driven by the costs for medical services rising, as well as the demand from clients on medical services.
Salary increases are driven by company performance, individual performance, union agreements, industry trends and salary market movements.
Why do I have to be on a company appointed medical aid?
Whether or not an employee must belong to a company appointed medical aid depends on the company you work for.
Companies that make medical aid compulsory for their staff are typically able to admit new members without paying late joiner penalties or being subjected to waiting periods.
Medical aid schemes would typically not grant automatic membership to new staff without underwriting them unless membership is compulsory.
What medical aid/retirement fund should I choose?
SARA often gets asked what medical aid plan employees should select. This will differ depending on your individual needs.
Companies that offer medical aid benefits as part of their employment contracts generally have an appointed advisor within the scheme to guide employees on the most appropriate plan for their circumstances and family situations.
Speak to the advisors to make an informed decision. Similarly, retirement fund contributions will differ depending on your needs.
Discuss your retirement goals with a financial advisor to make sure you are on track to meeting your retirement goals.
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