It’s exciting to receive your payslip at the end of a hard month; but they can be tricky documents to understand. When you are applying for a new job, you are eager to find out what your new potential cost to company and nett pay is going to be. Do you confidently know the difference between a cost to company, cash component and nett salary? Hopefully this blog will give you more insight into these terms.
Being in recruitment, I am constantly assisting candidates who have recently joined the hunt for a new job. I have learnt that ‘remuneration dissections’ are the most important discussion point that any talent acquisition specialist should have with their candidates. My advice to anyone, talent acquisition specialist or candidates, would be to make sure that you have a good understanding of the candidate’s total remuneration package. Having a clear understanding from the beginning is only going to make the interview process and potential offer that much easier and accurate. The last thing you want after the stress of a lengthy interview process is to have that excitement of hearing the company wants to offer you your dream role, BUT oopsy, the initial remuneration information on your CV was wrong. This happens more times than I would like to think about.
Here are a few things to remember, and have an accurate understanding of, before you put yourself on the market:
- Cost to Company (CTC) – This is your gross salary AND benefits included in your package given by the company
- Gross Salary – This is the salary that employees receive monthly including allowances, overtime pay, commissions, bonuses and any other amounts, before your tax deductions
- Nett Salary – This is the amount that will appear in your bank account after all deductions such as tax, provident fund and medical aid contributions
Some questions to ask yourself before you start the Job Hunt:
Provident / Retirement funds – Does your Company contribute to retirement funding?
- How much do they contribute to Pension Fund or Provident Fund?
- What percent does your company contribute?
- How much do you contribute?
Medical Aid – Does your Company pay your medical aid?
- What percent and value does your company contribute?
- What percent and value do you contribute?
- What medical aid and plan are you on?
- Are you the main member?
- How many dependents (child/adult)?
Company benefits – What benefits does your company provide and are these part of your total package such as:
- Petrol allowance
- Car allowance
- Cell phone allowance
Bonuses – Do you get a 13th cheque?
- Do you get a 14th Cheque?
- Are your 13th of 14th cheques based on your cash component or cost to company salary?
- Do you get bonuses based on personal or company performance?
- Is it guaranteed?
- What month is it paid?
- Have you received it every year?
Contractual information – Do you have a lock in clause due to a sign on bonus or relocation bonus?
- Do you have a company loan for anything? Study? Travel?
- Do you have shares in the Company?
- What is the value of the shares?
- What would happen to the shares if you were to resign?
- Are you eligible for Profit Share in your current position? When is this paid? What is the payment based on?
- Do you have a restraint of trade? What area does it cover and how long is it for?
- Do you earn commission? How is the commission calculated?
Company information – When is your next salary increase due?
- What is your notice period? 30 days / 1 Calendar month / 2 Calendar months?
- What is your annual leave entitlement?
You get one chance to reflect your requirements properly and to give your potential employer a correct and thorough understanding of your current package. The onus is on the owner to take the time to find out every bit of information before you hit the market place!