Retirement Funding Income vs Non Retirement Funding Income – Part 1 of 3

February 7, 2011 in Uncategorized

  • Your Company Pension or Provident fund contributions are based on your Retirement funding income.  This is defined by the rules of the fund, and it is important to understand what pay elements make up an employees retirement funding income, as there are tax implications on these calculations.
  • If an employee contributes towards a Pension/Provident Fund, usually Normal earnings are retirement funding income. This includes sick pay, leave pay, FRL, etc as these are earnings which can replace Normal pay and are therefore RFI.

1.       Your Company Pension or Provident fund contributions are based on your Retirement funding income.  This is defined by the rules of the fund, and it is important to understand what pay elements make up an employees retirement funding income, as there are tax implications on these calculations.

 

2.       If an employee contributes towards a Pension/Provident Fund, usually Normal earnings are retirement funding income. This includes sick pay, leave pay, FRL, etc as these are earnings which can replace Normal pay and are therefore RFI.

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