For Candidates
Know your numbers: what your payslip is actually telling you
CTC, gross, net, PAYE, UIF. The terms behind every offer, explained in plain language.
In almost every interview, a number gets mentioned. But that number means very different things depending on how it is calculated, and a lot of candidates accept an offer without fully understanding what it actually means for their bank account.
Before you can compare offers properly, or even understand your own payslip, you need to know a few basic terms. None of this is complicated once it is explained simply, and understanding it puts you in a much stronger position at offer stage.
The key terms, explained simply
- Cost to company (CTC) is the total amount it costs the employer to employ you. This is the number most often quoted in a job advert or interview, and it includes your salary plus the value of benefits like medical aid and pension, not just the cash that lands in your account.
- Gross salary is your salary before any deductions are taken out.
- Net salary, also called take home pay, is what actually lands in your bank account after everything has been deducted.
- Deductions typically include PAYE, which is income tax, UIF, and if your package includes them, your own share of medical aid or pension contributions.
A simple example
Say your offer is a CTC of R20,000 a month, purely as an illustration. If R2,000 of that is set aside for your medical aid and pension contributions as part of the package, your gross salary before tax works out to R18,000. Tax and UIF are then calculated on that R18,000, and what is left after those deductions is your net, or take home, pay.
This is exactly why two people can be offered the same headline number and end up with very different amounts in their bank account, because one offer might be pure salary, and the other might have benefits built into the same total.
UIF, in plain terms
UIF stands for Unemployment Insurance Fund. It is 1 percent of your salary, deducted every month, up to a monthly salary cap. In the current tax year, that means the most any employee pays towards UIF is around R177 a month, no matter how much they earn above the cap, according to current UIF and PAYE guidance. This money exists to support you if you are ever retrenched or unable to work, so it is not lost money, it is a safety net you are paying into.
PAYE, in plain terms
PAYE is the income tax your employer deducts from your salary and pays to SARS on your behalf every month. The more you earn, the higher the percentage of tax you pay on the portion above certain thresholds, it is not a single flat rate applied to your whole salary. The good news is you do not need to calculate this yourself, your employer works it out and pays it over for you.
One thing most people do not know
If you belong to a medical aid, SARS gives you a small monthly tax credit that reduces the tax you owe, currently R376 a month for you as the main member and your first dependant, and R254 a month for each additional dependant, according to SARS medical aid tax credit figures. So medical aid is not only a cost taken from your CTC, it also slightly reduces the tax you pay.
The one question that avoids most disappointment
Whenever a number comes up in an interview or offer, ask one simple question: "Is that gross, or is that CTC?" That single question tells you almost everything you need to know before you compare it to any other offer, or start budgeting around a number that may not be what actually lands in your account.
About Fouché & Co Recruitment
Fouché & Co Recruitment is a Durban based agency specialising in permanent placements across South Africa. We recruit for roles in Finance, Accounting, IT, Engineering, Insurance, Manufacturing, Warehouse & Logistics, and Administrative and Executive positions, with opportunities in KwaZulu-Natal, Gauteng and the Western Cape. We help you find the right role, faster and with confidence.
Contact us today at hello@foucherecruitment.co.za or 031 006 5279 to discuss your next career move.
Frequently asked questions
What is the difference between CTC and gross salary?
CTC is the full cost to the employer, including benefits like medical aid and pension. Gross salary is usually what is left once those benefit contributions are set aside, before tax is deducted.
Why is my take home pay lower than the salary I was quoted?
The number quoted at interview stage is very often the CTC, not the amount that lands in your bank account. Tax, UIF, and your share of any benefits are deducted before you receive your net pay.
How much UIF do I pay each month?
1 percent of your salary, up to a monthly cap. In the current tax year, the most any employee pays towards UIF is around R177 a month, regardless of how much they earn above the cap.
Do I need to work out my own tax?
No. Your employer calculates your PAYE and pays it over to SARS on your behalf each month, based on the official tax tables.
Why does Fouché & Co always clarify whether an offer is CTC or gross?
Because it changes what an offer is actually worth to you. We ask this on every offer we present so you can compare roles fairly and know exactly what you are agreeing to before you accept.
Want to know what an offer is really worth?
We clarify whether every offer is CTC or gross before you decide, so you can compare roles fairly and budget around a number that is actually real. Durban is home ground, and we place nationally — across KwaZulu-Natal, Gauteng and the Western Cape.