Your First Paycheck: What does it all mean?
Your First Paycheck: What does it all mean?
That SMS just dropped. Or maybe the email with your first official payslip just landed in your inbox. But then you open that payslip... and suddenly it's less than you thought. What are all these weird acronyms and numbers? Don't stress. Your payslip isn't a secret code. Let's decode it.
Decoding Your Payslip: The Two Core Numbers
Think of your payslip as a before-and-after photo of your money.
1. Gross Pay: The Dream Number
This is the big number from your job offer (e.g., "R12,000 per month"). It's your total earnings before things are taken off (deductions).
2. Net Pay: The Real Number
This is the number that actually hits your bank account. It's your Take-Home Pay after all the deductions.
The Deduction Crew: Who's Taking a Slice?
These deductions are taken before your money reaches your account. Most are mandatory, serving important purposes.
- a. PAYE (Pay As You Earn) - The Taxman Cometh
- What it is: Your income tax, deducted by your employer and sent straight to SARS.
- How it works (SA Context): Not everyone pays tax. SARS sets tax thresholds. If you earn above the annual threshold (R95,750 for 2025/26), you pay PAYE.
- b. UIF (Unemployment Insurance Fund) - The Safety Net
- What it is: A fund that pays you money for a few months if you lose your job or cannot work due to illness or maternity.
- How it works: You pay 1% of your salary (up to a limit), and your employer pays 1%. It's a mandatory, non-negotiable insurance.
- c. Retirement Savings (Pension/Provident Fund) - Future You
- What it is: Money set aside for when you stop working. Often a fixed percentage (e.g., 7.5%) of your salary.
- Why it matters: Mandatory for many jobs, and it is crucial for a comfortable retirement. Your employer usually contributes too!
- d. Medical Aid - The Health Protector
- What it is: A monthly contribution for private healthcare (hospital stays, doctor visits, chronic conditions).
- Tip: If not offered, consider a basic hospital plan yourself (R1,000–R2,000/month).
- e. Other Deductions - The Small Fry
- These vary: Group Life Cover (insurance if you pass away), Funeral Cover, Union Fees, or employer loan repayments.
Your First Payslip: A Real Example
Scenario: Graphic Designer with a R12,000 Gross Salary
Gross Pay: R12,000
Deductions:
- PAYE: R724
- UIF: R120
- Pension Fund: R900
- Medical Aid: R1,500
- Group Life Cover: R100
- Union Fees: R50
Total Deductions: R3,394
Net Pay (What hits your bank!): R8,606
Your Action Plan: Own Your Payslip!
- Review It Every Month: Save a digital or physical copy. Make sure the numbers make sense and nothing unexpected pops up.
- Clarify Any Doubts: If a deduction is unclear, email HR or ask your manager. It's your money and your right to know!
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