Retirement Annuity FAQ

What is tax rebate on a retirement annuity?

Unlike your medical aid contributions, your RA contributions qualify for a tax deduction or a tax refund rather than a tax rebate. Although you are free to contribute as much as you want to your RA, the retirement annuity tax relief for the 2017 tax year is set a maximum rate of 27,5% of income, subject to a rand cap of R350,000. This R350,000 rand cap (and the 27,5% limit) however includes the contributions made to a workplace pension or provident fund. If you contribute over the limit: SARS keeps a record of all unc...

What is non-pensionable income?

Non-pensionable income is that part of your income which does not attract a compulsory contribution to your employer’s pension or provident fund.If you do not belong to a workplace retirement fund, then all your income would be non-pensionable. Alternatively, if only your basic salary is pensionable, other remuneration such as commissions, bonuses and overtime would be considered non-pensionable. The earnings of self-employed people, as well as taxable rental and interest income are also non-pensionable. The concept o...

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