Cost to company vs gross salary (2026/27)
Figures for the 2026/27 tax year. Prime rate checked 9 October 2026; tax tables and fees checked 30 September 2026. By AfroTech.
Job offers in South Africa often quote a cost-to-company (CTC) package rather than a salary. CTC is what you cost your employer in total. Your gross salary is the cash part of it, and your take-home pay is what's left after tax.
Three numbers, three meanings
- Cost to company: basic salary plus the employer's contributions to your retirement fund and medical aid, and sometimes its UIF (1%) and Skills Development Levy (1%).
- Gross (basic) salary: the cash part, before tax.
- Take-home (net) pay: gross salary less PAYE, UIF and your own deductions.
One package, three structures
| A R 40 000 CTC package | Basic salary | PAYE | Take-home | Saved for retirement |
|---|---|---|---|---|
| All cash | R 40 000 | R 7 685 | R 32 138 | R 0 |
| R 3 000 to retirement | R 37 000 | R 6 755 | R 30 068 | R 3 000 |
| R 3 000 to retirement, R 2 500 to medical aid | R 34 500 | R 6 003 | R 28 320 | R 3 000 |
Per month, under 65, 2026/27 SARS tables. Medical aid for two people. Employer's UIF and SDL not taken from the package.
Putting R 3 000 a month into the retirement fund cuts take-home pay by only R 2 070, because the contribution is tax-deductible: PAYE falls by R 930.
How employer contributions are taxed
Your employer's retirement and medical aid contributions are taxable fringe benefits: they're added to your income for PAYE. The retirement contribution is then deducted as if you'd paid it yourself, up to 27,5% of your income and R 430 000 a year. Medical aid earns the usual tax credits: R 376 a month each for you and your first dependant and R 254 for each other person.
Comparing offers
- Ask for the breakdown: basic salary, retirement and medical aid contributions, and whether the employer's UIF and SDL are inside the package.
- Compare take-home pay, but count the retirement contribution too: it's your money, saved with a tax break.
- Know your number. To take home R 25 000 a month with no deductions you need a gross salary of R 29 808; the net to gross calculator works it out for any amount.
Try it with your own numbers. The ZARWise calculator uses the same figures as this page.
Work out your CTC take-home pay