Tax Bracket Explained


So what would your expected salary be? Perhaps the most overused clichéd question used by recruiters, however the answer reveals a lot of valuable information about a candidate and perhaps even raises more questions to be answered by both parties. Are you being realistic or greedy? Can you prove that you are worth this amount?

Here is another aspect for both parties to consider, TAX. It is one of life’s certainties however it is so often forgotten on a daily basis. Why should your salary be any different? While South Africa’s progressive tax system, may make sense to most, to some it is not quite clear and perhaps this can help. Essentially the idea of a progressive tax system is that the more you earn, the more tax you pay and is based on the notion that if you can afford to pay more, you should. While this may seem unfair to some, the idea is to alleviate the tax burden of the lower income earners in the country. In an economic environment which does not promise much growth and the cost of debt has just become more expensive, and in all likelihood will become more expensive in the near future, alleviating the tax burden on those close to or below the bread line is vitally important for South Africa’s society in general.

The image below breaks down the approximate percentage of your salary that will be dedicated to tax. While these figures are rounded off to the nearest hundred or percentage, and is by no means an exact replication of every situation, it paints a picture of the importance of considering the tax implications on what you are earning now as well as on what you should be expecting. Paying tax takes away from ones disposable income spent on basic items (food, petrol, schooling etc.). So when asked the dreaded “what are you expecting?” question, it is so important to keep in mind what percentage of your salary is disposable and what percentage is compulsory tax payments. Expecting a higher salary may mean you get paid more however it also may push you into the next tax bracket therefore the percentage of your salary that gets deducted for tax is higher. So while your cost to company (CTC) may be higher, the actual disposable amount of cash you walk away with may be a lot less than what you were expecting which may lead to you regretting your decision in giving the wrong answer to the most basic and clichéd question in recruitment.

Tax Infographic