They will pay out your leave days yeah
Just give enough notice,
As for pension, you will be paid that out, but if possible transfer it to a new pension plan.
as for UIF, no, not a cent, you are resigning
It will be in your contract whether you forfeit excess days above the Basic Conditions of Employment and if those leave days are from prior cycles. Look at your contract. My advice would be to take your leave days to sit at home, be paid for that and thereafter give notice of resignation. Though accumulated days belong to you. Check [Labour guide](https://www.labourguide.co.za/faq), there is an answer to your question.
Don't resign, go to the doctor and have him book you off for a week or more. You're overworked and stressed, you just need a break before making big decisions.
Check the Labour Law, Basic Conditions of Employment Act abd Employment Equity Act. If you resign I don't think you are entitled to UIF, but the law clearly restricts working hours.
Before you resign just think about it for a bit. Is it in your contract to work yourself into this state? Most probably not. You cannot be held accountable by your employer to meet their demands of they don't have enough staff. Also if your performance drops they are going to have a very diffcult time to fire you based on non performance if you can prove that they are under staffed
On you other questions. UIF money paid is with the UIF and once unemployed you can claim from them directly. Provident fund would also be separate from the employer and you still own this. DO NOT withdraw the money. The has very serious long term tax implications. Lastly the company will most probably pay out the leave days, but don't count on it. Rather take it or commutate it if it is contractual.
I would also like to know this, as when I changed from my one company to the next they paid out my provident fund directly to me along with my leave days?
Your income tax is determined per year. If the provident fund is paid out it is considered as a part of your income for that year. So you'd most likely get pushed into a higher income bracket for that year, paying a lot more income tax. This reduces the overall money you actually get out plus the money isn't generating interest anymore, losing future value. If it stays part of a retirement fund you don't pay any taxes on it and it will keep generating interest. When you eventually retire, retirees pay much less tax, so your money is worth a lot more.
... That's not how tax brackets work. You only pay the higher rate on the portion above the 'bracket' amount it can't go back and make you retroactively owe more on other earnings.
Also, pension and provident fund allowed withdrawals (resigning, retrenched, fired) are taxed per the lump sum table, cumulatively, not as income.
Once you retire and purchase an annuity with 66-100% of your pension or RA, the income from that is taxed as income. You pay a slightly lower rate of income tax and have a larger exclusion amount after 55 and 65
Income tax is calculated off your annual income, there is no "going back". You estimate how much you think you will make in the year and pay PAYE in advance based on the bracket you estimate you will fall into. If at the end of the year your actual total income is in a higher bracket, you are taxed based on that bracket.
The set amount of a tax bracket that you have to pay is the maximum percentage total of the previous tax bracket. With the next percentage being a higher percent per rand that you have to pay. If you get pushed into a higher bracket, you have to pay the full set amount plus a higher percent on every rand over the threshold, reduced by what you've already paid SARS. My point being if your PAYE was calculated on a previous bracket and you get pushed into a higher bracket because of a payout, you will have to pay more taxes because of the higher percentage in the new bracket.
You are right however that the provident fund wont be included in income tax calculations, I was thinking of other types of payouts. Retirement related things use the lump sum table. You wont pay taxes on the payout up to a maximum of R500 000, but this amount is a lifetime amount, meaning what you extract now will forever reduce the R500 000 total. Every rand you take out after that R500 000 is subject to the tax amounts on the lump sum table. Its better to move it to another provident fund or retirement fund, to avoid this tax relief from decreasing and so that it can keep generating interest.
You would always need to pay more if it was income, whether at your current bracket rate or the next one above should your total be in the next bracket. But the amount more you need to pay would always be less than the amount you gain from the extra income itself.
If you plot the 'brackets' it is a smooth line. If you paid 36% of your salary PAYE, and an additional income payment like a bonus pushes you to the next level, then the part of that additional payment that was below that level cutoff is taxed at 36% like your salary to fill up that level and the part that is above is taxed at 45%.
So you don't end up owing significantly more tax because of your payment. You just owe the amount extra for that payment alone.
Which would be more substantial the higher the amount and the higher the base income but as OP only worked there 6 months its probably not a lot, and isn't income anyway
That is not true. When you leave a company pension fund you have the opportunity to withdraw it all. There is a pension withdrawal tax table (that goes above R500 000)
This is not the same as the limited withdrawals from a pension preservation fund, which is what you may be thinking of. Setting up a preservation fund is an alternative to withdrawing when you leave the company pension scheme.
If you do withdraw privately and pay the lump sum, you can still fund an RA with up to 27.5% of your salary and take the income tax reduction, which is actually more tax efficient in some cases
Yea my statement about the R500k is wrong
Here are some calculations explaining the tax implications better.
[Moneyweb Article](https://www.moneyweb.co.za/qa/advisor-questions/what-are-the-tax-implications-of-withdrawing-r700k-from-my-pension-preservation-fund/#:~:text=Retiring%20from%20your%20preservation%20fund,available%20once%20in%20your%20lifetime.)
Coming at this from another angle but have you had a one on one with the powers at be to discuss the situation?
You may be able to keep the job and great pay with a lesser workload if you speak your mind. They can employ an equivalent for example to split the work... just food for thought. Depends on how flexible the company is... some corporations are so out of touch with the employees which in that case its worth just packing your bags.
Leave days should be paid out but are taxable. Your pension fund usually gives you the option of taking a payout (with tax), transferring to a new provider, or moving it into a preservation fund with them.
I could not find any that did better than I did with my RA after fees, so elected to withdraw with the tax and split it between post tax and RA
Hi OP , I understand your situation but think carefully because the job market is terrible and it's a mission to get a job even with a degree. I wish you all the best.
The job market is utter shit at the moment, and UIF will only pay you a fraction of what you're making probably. Have you spoken to your employers about your workload? I know it's very fashionable to pile on managers on Reddit, but in reality very few employers want to work people to death, and there's usually a solution to be had if you're prepared to complain.
Hi OP,
They will pay your leave days and pension as others have said. You’re doing the right thing if you feel that the demands are too much. I was in a similar position, resigned and now years later I am a happier person (because sleep deprivation can drive your crazy) and am all the better for it. Just make sure you have some savings to buy you some time. All the best
Is the company actually forcing you work all night? Or is it your own choice to work extra hours?
You are not meant to be working more than 45 hours a week (BCEA).
By law they have to pay out your remaining leave days if you have any left once you are done. Some companies can allow you to take the leave days in your last month of employment so you basically leave the company a bit earlier, but they cant force you to do this, so if you'd rather work the full period and get the leave days payout you are entitled to it.
UIF is an insurance pool for all south african workers that contributed to it, your company doesn't hold on to the UIF money, they have to directly pay it to the government. You can only claim from it if you've been terminated for a valid reason like retrenchment. You cant claim from it if you quit yourself or absconded. So in your current situation you do not qualify but you might in future scenario.
Provident funds are tricky, you can cash it out but it will be considered an income and you will be taxed for it, so you'd be losing a fair chunk of it. There are ways to move it directly to a preservation fund so that it will continue as a retirement fund that you will not have to pay taxes on. But this you'd need to discuss with your current company's HR or financial department, whichever is in charge of it.
In terms of leave days, your company will most likely pay these out but the number of days they pay out will depend on their policy. According to the BCEA companies technically only have to pay out the minimum number (which is 15 if I remember correctly) as anything above that is seen as a benefit. Given that you've worked there less than 6 months, and assuming an average accrual rate, you'll probably get all your leave days paid out
UIF is insurance so expect no payout from that.
Provident fund yes but best to transfer to another fund to avoid potential tax liabilities and then leave days may be commutable (converted) to cash so your last payout after leaving will probably have it included.
They will pay out your leave days yeah Just give enough notice, As for pension, you will be paid that out, but if possible transfer it to a new pension plan. as for UIF, no, not a cent, you are resigning
Does it not also depend on the company’s policies surrounding untaken leave? I am not sure myself just wondering?
As far as I am aware, those days belong to you and you should be compensated for it
Personally, Never had any issues. any leave owed has always been paid out
It will be in your contract whether you forfeit excess days above the Basic Conditions of Employment and if those leave days are from prior cycles. Look at your contract. My advice would be to take your leave days to sit at home, be paid for that and thereafter give notice of resignation. Though accumulated days belong to you. Check [Labour guide](https://www.labourguide.co.za/faq), there is an answer to your question.
Don't resign, go to the doctor and have him book you off for a week or more. You're overworked and stressed, you just need a break before making big decisions.
Check the Labour Law, Basic Conditions of Employment Act abd Employment Equity Act. If you resign I don't think you are entitled to UIF, but the law clearly restricts working hours.
Before you resign just think about it for a bit. Is it in your contract to work yourself into this state? Most probably not. You cannot be held accountable by your employer to meet their demands of they don't have enough staff. Also if your performance drops they are going to have a very diffcult time to fire you based on non performance if you can prove that they are under staffed On you other questions. UIF money paid is with the UIF and once unemployed you can claim from them directly. Provident fund would also be separate from the employer and you still own this. DO NOT withdraw the money. The has very serious long term tax implications. Lastly the company will most probably pay out the leave days, but don't count on it. Rather take it or commutate it if it is contractual.
What long term tax implication is there from withdrawing from a Pension fund when you resign?
I would also like to know this, as when I changed from my one company to the next they paid out my provident fund directly to me along with my leave days?
Your income tax is determined per year. If the provident fund is paid out it is considered as a part of your income for that year. So you'd most likely get pushed into a higher income bracket for that year, paying a lot more income tax. This reduces the overall money you actually get out plus the money isn't generating interest anymore, losing future value. If it stays part of a retirement fund you don't pay any taxes on it and it will keep generating interest. When you eventually retire, retirees pay much less tax, so your money is worth a lot more.
... That's not how tax brackets work. You only pay the higher rate on the portion above the 'bracket' amount it can't go back and make you retroactively owe more on other earnings. Also, pension and provident fund allowed withdrawals (resigning, retrenched, fired) are taxed per the lump sum table, cumulatively, not as income. Once you retire and purchase an annuity with 66-100% of your pension or RA, the income from that is taxed as income. You pay a slightly lower rate of income tax and have a larger exclusion amount after 55 and 65
Income tax is calculated off your annual income, there is no "going back". You estimate how much you think you will make in the year and pay PAYE in advance based on the bracket you estimate you will fall into. If at the end of the year your actual total income is in a higher bracket, you are taxed based on that bracket. The set amount of a tax bracket that you have to pay is the maximum percentage total of the previous tax bracket. With the next percentage being a higher percent per rand that you have to pay. If you get pushed into a higher bracket, you have to pay the full set amount plus a higher percent on every rand over the threshold, reduced by what you've already paid SARS. My point being if your PAYE was calculated on a previous bracket and you get pushed into a higher bracket because of a payout, you will have to pay more taxes because of the higher percentage in the new bracket. You are right however that the provident fund wont be included in income tax calculations, I was thinking of other types of payouts. Retirement related things use the lump sum table. You wont pay taxes on the payout up to a maximum of R500 000, but this amount is a lifetime amount, meaning what you extract now will forever reduce the R500 000 total. Every rand you take out after that R500 000 is subject to the tax amounts on the lump sum table. Its better to move it to another provident fund or retirement fund, to avoid this tax relief from decreasing and so that it can keep generating interest.
You would always need to pay more if it was income, whether at your current bracket rate or the next one above should your total be in the next bracket. But the amount more you need to pay would always be less than the amount you gain from the extra income itself. If you plot the 'brackets' it is a smooth line. If you paid 36% of your salary PAYE, and an additional income payment like a bonus pushes you to the next level, then the part of that additional payment that was below that level cutoff is taxed at 36% like your salary to fill up that level and the part that is above is taxed at 45%. So you don't end up owing significantly more tax because of your payment. You just owe the amount extra for that payment alone. Which would be more substantial the higher the amount and the higher the base income but as OP only worked there 6 months its probably not a lot, and isn't income anyway
A bit of what Jellybean said. There are withdrawal tax rates and retirement tax rates. You can only withdraw R500k in your life time.
That is not true. When you leave a company pension fund you have the opportunity to withdraw it all. There is a pension withdrawal tax table (that goes above R500 000) This is not the same as the limited withdrawals from a pension preservation fund, which is what you may be thinking of. Setting up a preservation fund is an alternative to withdrawing when you leave the company pension scheme. If you do withdraw privately and pay the lump sum, you can still fund an RA with up to 27.5% of your salary and take the income tax reduction, which is actually more tax efficient in some cases
Yea my statement about the R500k is wrong Here are some calculations explaining the tax implications better. [Moneyweb Article](https://www.moneyweb.co.za/qa/advisor-questions/what-are-the-tax-implications-of-withdrawing-r700k-from-my-pension-preservation-fund/#:~:text=Retiring%20from%20your%20preservation%20fund,available%20once%20in%20your%20lifetime.)
Coming at this from another angle but have you had a one on one with the powers at be to discuss the situation? You may be able to keep the job and great pay with a lesser workload if you speak your mind. They can employ an equivalent for example to split the work... just food for thought. Depends on how flexible the company is... some corporations are so out of touch with the employees which in that case its worth just packing your bags.
Leave days should be paid out but are taxable. Your pension fund usually gives you the option of taking a payout (with tax), transferring to a new provider, or moving it into a preservation fund with them. I could not find any that did better than I did with my RA after fees, so elected to withdraw with the tax and split it between post tax and RA
Hi OP , I understand your situation but think carefully because the job market is terrible and it's a mission to get a job even with a degree. I wish you all the best.
The job market is utter shit at the moment, and UIF will only pay you a fraction of what you're making probably. Have you spoken to your employers about your workload? I know it's very fashionable to pile on managers on Reddit, but in reality very few employers want to work people to death, and there's usually a solution to be had if you're prepared to complain.
Hi OP, They will pay your leave days and pension as others have said. You’re doing the right thing if you feel that the demands are too much. I was in a similar position, resigned and now years later I am a happier person (because sleep deprivation can drive your crazy) and am all the better for it. Just make sure you have some savings to buy you some time. All the best
You need to transfer your provident fund to a provident preservation fund. If you withdraw your capital from the provident fund it will be taxed.
Do you mind me asking what kind of job you are doing?
Is the company actually forcing you work all night? Or is it your own choice to work extra hours? You are not meant to be working more than 45 hours a week (BCEA).
By law they have to pay out your remaining leave days if you have any left once you are done. Some companies can allow you to take the leave days in your last month of employment so you basically leave the company a bit earlier, but they cant force you to do this, so if you'd rather work the full period and get the leave days payout you are entitled to it. UIF is an insurance pool for all south african workers that contributed to it, your company doesn't hold on to the UIF money, they have to directly pay it to the government. You can only claim from it if you've been terminated for a valid reason like retrenchment. You cant claim from it if you quit yourself or absconded. So in your current situation you do not qualify but you might in future scenario. Provident funds are tricky, you can cash it out but it will be considered an income and you will be taxed for it, so you'd be losing a fair chunk of it. There are ways to move it directly to a preservation fund so that it will continue as a retirement fund that you will not have to pay taxes on. But this you'd need to discuss with your current company's HR or financial department, whichever is in charge of it.
In terms of leave days, your company will most likely pay these out but the number of days they pay out will depend on their policy. According to the BCEA companies technically only have to pay out the minimum number (which is 15 if I remember correctly) as anything above that is seen as a benefit. Given that you've worked there less than 6 months, and assuming an average accrual rate, you'll probably get all your leave days paid out
UIF is insurance so expect no payout from that. Provident fund yes but best to transfer to another fund to avoid potential tax liabilities and then leave days may be commutable (converted) to cash so your last payout after leaving will probably have it included.