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Thread: TCoE (total cost of employment) advice for employees

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    TCoE (total cost of employment) advice for employees

    Hi
    Can anyone advise or direct me to an area where i can get advice
    on a pay package breakdown (TCoE) and how it works or how i can
    decide if a job as acceptable.
    Your help is really appreciated

    Best regards

    Rozzer

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    Site Caretaker Dave A's Avatar
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    I take it you've been given a fairly complex offer then.
    What are you struggling with evaluating?

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    Hi Dave A

    It's not actually for me but for my daughter and she is reluctant to leave one job for another one
    when she is unsure of the NETT salary.
    TCoE is, a far as I am concerned very misleading to say the least and is weighted towards the
    employer.
    If a total package is say for e.g R400.000.00 per annum.
    A pension or Provident R25.000.00
    Medical R45.000.00
    13th cheque R25.000.00
    What would be her monthly take home pay and is there a formula or method which is
    used as a standard to work these packages out?

    Thanks for your input and advice

    Kind regards
    Rozzer

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    By the response it seems I'm not the only one who is unsure of how
    the TCoE set up works.

    Rozzer

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    Hi Rozzer
    It is quite simple really. Lets call the TCoE company A and the competing company B.

    Assuming that that B is offering a salary and a range of perks, while A is offering a TCoE number:
    Take the number offered by A and deduct the perks offered offered by B. If the remaining result exceeds the salary offered by B, then it is a better offer. That's all there is to it.

    Also, what A is saying is that they are flexible and are prepared to structure your package according to your needs, provided the total cost to them is fixed; not everybody's needs are the same.

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    Hi Clive-Triangle

    Your analysis of the situation and solution is fine but in my case the existing
    company is on a contract basis and not really able to compute the results
    the same, I have already done a simple exercise similar to yours but a standard
    formula is what I'm really looking for. this will also assist for future opportunities.

    Thanks for your input

    Kind regards Rozzer

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    Site Caretaker Dave A's Avatar
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    I'm used to just plugging in the details into a payroll program of late - and after scratching around to process your example manually - gee, it's getting complicated nowadays!

    Let's run over a few things:
    There is a substantial difference between the handling of Pension and Provident Fund contributions - Pension Funding contributions are tax deductible, Provident Fund contributions are not. This would affect where you would put this budget allocation on the payslip.

    So what'll it be? Pension/Retirement Annuity or Provident Fund?

    On the medical calculation - Marital status and how many dependants?

    Then - what about a travel allowance? Would you want a travel allowance built into the package? If yes, how much?

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    rozzer, if you are doing this on a regular basis, it may be worth your while to get a package that does the calculations for you. I use BackTax, have a look and see if it meets your needs. You can read up here

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    Hi Dave & Clive

    Thanks for your input and advice, however I have done some searching on the web
    and it is obvious that TCoE is definitely a design for the employer to ascertain the
    the cost of a particular post and not suited for the employees needs.
    It also appears that this system is slowly fading out in favour of a simpler system.
    It really boils down to checking and double checking what you are being offered
    before accepting anything as not everything is in black and white in the formula!!

    Regards

    Rozzer

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