HALF of South African employers surveyed in a recent poll commissioned by pay provider, Floatpays will not be issuing 13th cheques as part of their employee value proposition (EVP).
This finding comes as many local companies continued to face financial pressures, exacerbated by a struggling economy amid the Covid-19 pandemic.
Floatpays founder Simon Ward said, however, there was a way that employers could continue to provide this crucial benefit to their staff to help them supplement employees’ December pay to cover excess expenses that come with the festive season and the January financial sufferings.
“Unfortunately, due to increasing financial strain, many South African employees have become reliant on their 13th cheque, rather than seeing it as a ‘nice-to-have’. Without it, a large proportion of employees turn to credit,” Ward said.
Meanwhile, Yolandi Esterhuizen, Sage Africa and Middle East-registered tax practitioner and director for product compliance, said during these uncertain and challenging times, it was welcoming to receive a token of appreciation from an employer ahead of the festive season.
“However, the South African Revenue Service (Sars) may expect to share in your good fortune when your company rewards you with a gift voucher, use of company property for the holidays or something for your spouse or children,” Esterhuizen said.
She said if an employer offered an employee a gift voucher, instead of cash as an end-of-year gratuity, it would be taxed at the same rate as if it was cash.
For a physical gift, Sars would see it as a taxable benefit if one’s company gave them an item that could be seen as an asset, for example, a cellphone or a watch.
BUSINESS REPORT ONLINE