How could one structure a remuneration package for a manager to be most beneficial to both him and the company, tax wise where: 1. He must provide for his own pension/retirement scheme 2. His own medical scheme Could a travel allowance be considered? Your valuable inputs needed urgently.
Give him lots of leave, if he needs leave. Noone gets taxed on that unless he doesn't take it. Can be used to play golf and the like. Holiday accomodation on the company, in a place that can qualify as still at the office so theres no fringe benefits tax. Why should he have to pay all his own medical and all that jazz - put it on the company. The way companies do the whole "cost to co" calc is just making it easier to move cos we can compare apples to apples, and the tax man takes 40% of what's on offer. Its getting less and less viable to have a job. Call him a consultant, and pay fees to his cc, instead of paying a salary. Esp if its a white guy, then you don't have to worry about your EE figures. lol. His tax on a 500k income in a cc is much more efficient, and he can run all those expenses of medical aid etc through his own books to get tax deductions. Just run that idea by your accountants to make sure its legal.
I've read the other comments and decided to post more direct to your enquiry. If you are the manager of your "own" company, a lot depends on what your personal financial position reflects to find a balance between the company and the manager-you have to disclose a lot of info to your planners to help you out. Be aware that any attempt to address the issue at leasure and without proper documentation leaves one prone to disasterous results should SARS investigate and attack the structure. If you are employed "independently" you can take advantage of a number of benefits, where medical aid, vehicle reimbursive allowance, pension fund contribution, even retirement ann contributions, and the like are elements of tax friendly structuring. Depending, though, on what the employer's policy on structuring allows. Unfortunately no quick fix answer, and definitly more often humourously addressed by the participants on the OST.
You need to maximise travel allowances etc. It is quite easy if you understand personal income tax - i used to have a "package spreadsheet" that i used when i was in practice but outdated by almost three years now.
kokkie its not that easy anymore. SARS leaves little room for innovation on personal tax side. the broader divide is whether you are classified as an employee or are able to offer your services as a consultant. but even as a consultant there are SARS pitfalls. if your employer controls your work and/or working hours and if a significant percentage, or worse, all your work is for only ONE "customer", you will be taxed as an individual ! technically, SARS wants to see and tax EVERYTHING that accrues to you in cash or otherwise in terms of and subject to limits of the income tax act. this is a complex subject and i urge you to obtain one on one advice from a specialist. my advice, don't get drawn into too many fragmented allowances as an employee that will make the filing of your return a nightmare and will see you having to restructure your package continuously with SARS ammendments to the act. with each item you are claiming comes more onus to retain records for proof. decide if you could be a consultant at an arms length, if not, you will have to go employee route. then negotiate best possibilities for yourself, ie let company pay med aid and claim the relevant caps (although there is talk of this being abolished once the new national social security system goes live), let the company pay for an approved prov fund for retirement, life insurance, disability benefits, dread disease etc (these are all tax deductible for the company and you given a certain set of rules), decide on co car versus car allowance (bear in mind deemed tables discontinue at end of this tax year). ask for a petrol card, i have not seen this targeted by SARS etc etc etc - there are many options but with every option come endless rules - you have to consult with someone who knows their stuff.
Petrol cards ARE attacked if the user receives a reimbursive travel allowance, only use this if the petrol card is deducted in full against your pay slip OR if you have the benefit of a company vehicle. This is not IMO, this is for real.