When you decide to enter the job market, it is of utmost importance to know exactly what your current total remuneration package is, also known as COST TO COMPANY.   The current total remuneration package  that is given to the prospective employer must be 100% correct. There is nothing that upsets a prospective employer more than a candidate who comes back, after an offer has been made, and suddenly remembers a number of other benefits that they did not mention initially and, nine times out of ten, the deal will fall flat.

I am quite amazed at how few people truly understand what their Total Cost to Company package is and moreover, how many people cannot adequately explain the figures on their payslips or even know what they are for.

I hope that the following will help you:

Basic Salary

This is your cash component and, on most payslips, will appear in the left side column, designated  as “Earnings”. In this column you may find items such as basic salary, car allowance, housing allowance, cell allowance, etc. These are all the items that are paid out to you in cash (before deductions).

But, this is NOT your total remuneration package

Cost to Company Package

This is everything that you cost your company. In addition to the basic salary/earnings above, many people also have other benefits, such as pension/provident fund, medical aid, group life, funeral cover, disability cover – some or all of these. Also included here are items such as petrol card,  company car,  company cellphone, performance bonus, 13th cheque , standby, overtime and commission. Let’s look at some of these more closely:

In each instance you need to ADD the benefits below to your Basic Salary above

1. Pension/Provident Fund/Medical Aid/ Group Life/Funeral Cover:

You need to add the amount that your company contributes towards the above benefits. Not the full amount that you pay for these benefits because, remember, the company pays a portion and you pay a portion. Your portion is taken out of your earnings, so only the company’s portion is added. Only if the company pays any of these benefits in full and there is no deduction for them in the “Deductions” column on your payslip, can you add the full amount.

2. 13th Cheque:

If you have a guaranteed 13th cheque, this needs to be added

3. Company Car:

If you currently have a company car with a full maintenance plan, tyres replaced when necessary, etc. you need to do your homework and calculate what it would cost you if this were your car. You need to compare apples with apples. If you have a Kia Picanto as a company car, you cannot do your calculations based on the Mercedes you would like to drive.  You need to base it on the exact same car as the one you have and do these calculations correctly and carefully and this amount must be added. Very few companies offer company cars, so the prospective employer needs to make up for the company car that you will be losing. This only applies to a full company car that you use every day for business and personal travel. If you drive your car to work and then go to see clients in a pool car, come back and pick up your own car again, this does not qualify under a company car and nothing can be added.

All benefits or items that are guaranteed and have a fixed value that you are paid on a monthly, quarterly, bi-annual or annual basis form part of your Total Cost to Company package.

Additional Benefits

But, there are also a number of benefits that are not guaranteed and do not have a fixed value. The amounts/times you receive them are variable. Any benefits that are variable/ not guaranteed need to be listed separately as “Additional Benefits”. So, let’s look at these:

4. Petrol Card/Petrol paid per kilometer:

If you have a petrol card valued at R3000.00 per month and you are allowed to put in petrol to the value of that amount, regardless of whether this is for business or personal use, you add the full amount to your Cost to Company, as it is a guaranteed benefit.

If, however, your current job involves  travelling and you are only allowed to use the petrol card for business travel or you can claim your kilometres at X p/km , this must be indicated separately from your total cost to company salary as an “Additional Benefit”. Why?  This amount varies and you are only paid when you travel. It is not a regular guaranteed income

5. Performance Bonus:

As opposed to a 13th cheque, which is a fixed amount , a performance bonus may vary – you could get R3 000.00 one time and maybe R9 000.00 at another time and sometimes nothing. If you receive a quarterly, bi-annual, annual performance bonus, you need to add  up the rand value of the performance bonus(es) that you received in the last year. You also need to be able to prove that you received these bonuses by way of payslips on which these bonuses appeared.

6. Company Cellphone:

If you are allowed to use this cellphone for both business and private use with no questions asked, then the full amount may be added to your Cost to Company package. If, however, you are only allowed to use it for business calls and you have your own private cellphone, you need to put it under “Additional Benefits”

7. Paid ADSL Line/Laptop:

Most companies these days will supply you with a laptop and, if you need to work from home, they will carry the cost of the ADSL line. Just list them under “Additional Benefits”

Now, things can become even trickier and the following so-called “benefits” need to be understood in perspective. Here we are talking about 2 benefits in particular:

8. Overtime

You need to very clearly understand that, with both of the above, you are specifically paid to do extra work outside of your normal business hours. The moment that this is not required, this “benefit”  falls away, even within your current company, who may decide to stop overtime and standby at any time. Therefore, these are not “ benefits” at all. Very often, when a candidate moves from a company where he/she worked a lot of overtime/standby, to a company that has no overtime/standby, he/she expects the prospective employer to make up for the overtime he/she received at the previous company. This is unrealistic and will not happen.

And lastly:

9. Commission:

Commission is never included in your Cost to Company package. It is highly variable and depends on the work you put in. You will list your Cost to Company Salary and just say “plus commission” (in brackets you can put the rand value of your commission earnings for the past year).

The onus is on you to understand your total remuneration package and your payslip. If there is anything you are unsure of, it is your right to go to your HR Officer and ask them to explain it to you so that you, in turn, can explain it to your recruitment consultant and/or prospective employer.

Alternatively, if you need some help, you are more than welcome to give me a call on my cell number listed on the website. I will be more than happy to assist you!


(c) Wilma Gerber 2016