Earnings are the components of pay that add to what an employee receives: basic salary or wages, allowances, overtime, commission and bonuses. They are one of the four classes a pay component can fall into, alongside deductions, contributions and fringe benefits.
What it means
Earnings are what build gross remuneration up. Each earning component has its own tax treatment and SARS source code - a basic salary, a travel allowance and a bonus are all earnings but are taxed and reported differently. Grouping them as earnings is what separates money paid to the employee from money taken off.
Where it fits in
In a pay run the earnings components are summed into gross remuneration, from which deductions and the statutory charges are then subtracted to reach net pay. The split between earnings, deductions, contributions and benefits is how payslips and the IRP5 are structured.
Key rules
- The pay components that increase what an employee is paid.
- Summed into gross remuneration before any deduction.
- Each earning carries its own tax treatment and IRP5 source code.
- One of four component classes: earnings, deductions, contributions, fringe benefits.
