Pastel Payroll, Bursary Scholarship - Transaction Set up

[thorpie]

Hi All,

Our company would like to implement the bursary/scholarship to our employees, they all earn less than 600 000 K per annum, some have Grade R to matric and some have University.

I know I have to put the codes 6164 and 6165 under benefits but this does not reduce the tax, do I have to set up these two transactions to affect payslip and what tax boxes must I tick when doing the set up?

We will pay the value of the bursary over to the schools.

Thank you in advance

[Christel]

Hi there.
You would add code 6165 to the default tab. not necessary to change anything on the template.
Then lower your gross income with the monthly bursary amount.
Create a non taxable income code and call it "school fees" and add the bursary monthly amount.
Create a deduction code for the monthly deduction of these fees.
Remember to have a policy in place for the employees to sign that they agree to this, it needs to specify the way you will deal with a possible refund should the employees leave your employ within the year you have paid for this fees etc.

[dellatjie]

Are you allowed to replace part of the basic salary with the bursary?


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[Christel]

Yes, the whole idea is to lower the tax paid in the hands of the employee. Just as long as the annual salary does not exceed R600 000, you can do this.

[dellatjie]

I understand the part about lowering the tax, but I am wary about interfering with the basic salary. What if your employee is being paid minimum wage or just above it, and the bursary-split causes the hourly rate to go lower...


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[Christel]

That's why the company needs a policy of who will qualify for bursaries... maybe something like only management. Or people working more than 5 years ...etc?
Someone earning the minimum wage will surely not benefit as they will have little or no PAYE on their salaries...?

[dellatjie]

Hi guys,
I attended a FASSET tax seminar today where they specifically warned us against replacing a part of the salary with a subsidy.

Just a heads up.


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[thorpie]

Hi , at this seminar did they give you more info on how to process the bursary?