What is Remuneration?

An employee’s remuneration is made up of any income and/or allowance, which is paid or is payable to them by their employer, as well as the value of any benefits. It is also known as gross income and is used to calculate an employee’s tax (PAYE) liability as well as any UIF and SDL contributions applicable.

Therefore, remuneration can be calculated as cash income + cash allowances + the value of benefits.

There are certain exclusions from remuneration, which are applicable to more complicated payrolls – these give rise to the following definitions:

• Remuneration for PAYE purposes – total remuneration less any allowable taxable income deductions.
• Remuneration for UIF purposes – total remuneration less any exclusions in terms of the UIF Act. The most notable of these exempt amounts is commission.
• Remuneration for SDL purposes – this is generally the same figure as remuneration for PAYE purposes; however, certain exclusions may also apply.