CAPE TOWN, December 5 (ANA) – Some realities are harder to bear than others. The truth about Santa Claus is up there but, mercifully, it is usually a once-off blow. The truth about Christmas bonuses can be a much less neat and precise hit.
As December payday approaches some lucky employees will be looking forward to a bonus or perhaps a 13th cheque. Frequently, however, even those who have been promised such incredible bounty have disappointment in store because the so-called double cheque is seldom one.
The reason a 13th cheque often doesn’t translate into double the usual take home pay, explains Cathie Webb, director of the South African Payroll Association, is that the double cheque may have placed them in a higher tax bracket, which means a bigger tax deduction.
“One source of confusion is that people often hear from friends in another company, or even their own company that they in fact did receive a full double cheque,” explains Webb.
One reason is that some companies factor in the 13th cheque and deduct extra tax each month so that the employee’s December take home pay is virtually double the normal.
For the other 11 months their take home pay will be a bit less but the pain is spread evenly over the year.
“Different regimes may also apply within the same company for some reason,” says Webb.
Whatever the case, employees should inform themselves about company policy unless, of course, they like an element of surprise.
Webb says that while a 13th cheque forms part of an individual’s total package, a bonus is usually a variable amount linked to the company’s performance.
A bonus can also take an individual into a higher tax bracket resulting in higher than usual deductions in the month it is granted.
It bears mentioning too that, in this economic climate, a 13th cheque (indeed any bonus at all) is rather good fortune, not terribly unlike a large, hairy man with an uncanny knowledge of your favourite things squeezing himself down the chimney of a house without a fireplace to deliver gifts.
– African News Agency (ANA)
