Question

Can my employer contribute to a retirement annuity on my behalf?

Answer

Yes.

The employer can either contribute to the retirement annuity (RA) on the member’s behalf or deduct such contributions from the employee’s pay. If the employer makes the contribution on behalf of the employee, then this will attract fringe benefits tax that must be recovered from the employee.

In both cases, the employee can claim these RA contributions for tax, up to a maximum of 27,5% of gross remuneration or taxable income (whichever is the higher) subject to an annual deduction cap of R350,000.

The information and answers supplied in this section do not constitute advice as defined by the Financial Advisory and Intermediary Services Act, 37 of 2002.