Earnings to be included for the OID Annual Return (W.As.8)
The W.As.8 form gives an interpretation of the Act for items that must be included, and those that must be excluded from the calculation of the employees’ earnings. Earnings are all payments made regularly, before any deductions, whether in money or in kind, to employees. The following list are not exhaustive but are intended only to highlight certain remuneration items for which there may be some doubt as to their inclusion or exclusion.
- Overtime of a regular nature, but not intermittent or irregular overtime
- Bonus of any kind, including incentive bonuses and annual bonuses
- Commission, even though the amount may vary from month to month
- The cash value of food and quarters supplied to staff as part of a remuneration package. Cash value of fringe benefits such as company car, free accommodation or accommodation at a reduced rate, etc.
- Tangible fringe benefits (those that you can touch) such as a company car and free or cheap accommodation
- Travel and other allowances paid regularly, as paid part of the package
- Where the employee is remunerated in accordance with a package of benefits, all items forming part of the package, other than employer contributions such as medical aid contributions
- Earnings/Drawings paid to a working Directors of a Company or Members of a Close Corporation
- Payments of a reimbursive nature
- Overtime worked occasionally
- Payments for specific non-recurring tasks which do not form part of an employee’s normal duties
- Ex gratia payments
- Intangible fringe benefits such as the taxable portion of medical aid/pension contributions by the employer, etc.
- Payments to cover special expenses such as subsistence and travelling costs, lunch and costs for business meetings
- Travel and other allowances paid occasionally
- Profit sharing of Directors and Members
You can also click here and download the latest published W.As.8 that explains what is defined as an employee and discussed which earnings are included and excluded.
NOTE: The regulations to the COID Act clearly excludes travel allowance and subsistence allowance, which is in contradiction to the interpretation on the W.As.8 return form
Note on Package Structuring and OID
In your payroll application, the word “Package” for the whole of the “Cost to Employer” is often used, i.e. the employer’s contributions to the employee’s Medical Aid, Pension Fund and/or Provident Fund are included in the employee’s “Package”.
The wording of the W.As.8 in the paragraph explaining which Earnings must be Included for OID, refers to Packages as follows:
“Where the employee is remunerated in accordance with a package of benefits, all items forming part of the package, other than employer contributions such as medical aid contributions”.
It has been confirmed with OID that this should be read in conjunction with the point under Excluded which reads:
“Intangible fringe benefits such as the taxable portion of medical aid, pension contributions by the employer, etc.”
Therefore, if a “Cost to Employer Package” includes Medical Aid Contributions, Pension Contributions and/or Provident Fund Contributions, these Employer Contributions must NOT be included in the Earnings for OID purposes