For most of us, long-term insurance is one of our biggest assets, yet we spend very little time understanding it.

Am I over-insured? Does my company provide life insurance and how does that work?  What is my premium pattern? Am I going to be able to afford my premiums in ten years’ time?

This week’s podcast was motivated by a LinkedIn post by certified financial planner Bryan Nicol, entitled “R880k wasted on insurance my client didn’t need”.

He explained that most people consider employee benefits and personal finance as separate entities. Certified financial planner Johann Peens posted a comment with other advisers, saying clients do not even know what cover they have.

This discussion turned into a podcast conversation because while most people have some form of long-term insurance, most could not tell you much about it. As a result, we probably don’t have the right cover for our needs.

Many people are unaware of the extent of their insurance coverage, often assuming that their employer’s life insurance is sufficient. This leads to a false sense of security, which can lead to significant gaps in financial protection.

Many employees don’t fully grasp the difference between pensionable salary and risk salary, which can drastically affect the payout their loved ones would receive in the event of their passing.

In this discussion Bryan and Johann explain what you need to know about your employee benefits and the questions you should be asking your employer and financial adviser.

We then go on to explain premium patterns for long-term insurance and the affordability of insurance as you age. We explain the difference between different premium patterns, especially when it comes to comparing quotes, and how aggressive premium increases can leave you struggling to keep up with payments in later years.

This is why understanding and continuously reviewing your long-term insurance cover is so important. So listen to this podcast and make sure that those premiums you are paying are giving you bang for your buck.

Old Mutual is warning the public about a highly sophisticated investment scam currently circulating on social media and messaging platforms such as WhatsApp.

The scam falsely uses the names and images of real employees and the Old Mutual company logo to create a misleading sense of credibility.

The scam is positioned as a high-return, AI-powered investment opportunity and seems to be driven by a well-coordinated syndicate. The syndicate has already targeted several major financial institutions with this scam.

How to protect yourself

There are many things you can do to protect yourself from fraudsters and identity thieves.

• Check that the apps you download from the App store are verified and legitimate.
• Check and verify all requests for personal information and only share information when you are 100% sure there is a legitimate reason to do so.
• Never share login details such as passwords or banking pins with anyone. A legitimate financial institution will ask you to reveal your username or password.
• Always use a strong password that contains letters, numbers and symbols, and change it regularly.
• Apply multi-factor authentication whenever this is an option
• Don’t share too much information about your life on social media, and use privacy settings.

If you encounter any suspicious messages from Old Mutual, or have any security concerns, please contact CyberFraudWatch@oldmutual.com.

If you have fallen victim to a scam, it is critical that you immediately alert your bank via its fraud hotline.

As criminals become more sophisticated and more cunning, vigilance and awareness are key to ensure that you don’t become their next victim.

This post was based on a press release issued on behalf of Old Mutual.

Starting your first job is a big deal. It comes with new responsibilities, formative learning curves, a regular paycheque, and, unfortunately – tax. Geo Kilian, tax attorney at Hobbs Sinclair Advisory, lays out the tax basics you need to know as you kick off your career.

When we recently welcomed a new group of first-year employees to the company, a key insight struck me: so many of us stepping into the workforce for the first time have the same questions buzzing in our heads: What do I need to know about tax? When do I start paying tax? How does tax even work?

If you’re about to set sail on the ship of taxable income – whether you’re a recent graduate, a student earning some cash on the side, or just curious about what you need to know about income tax in South Africa – this beginner’s guide to paying tax is for you.

When do I need to register for tax?

Once you start earning an income, tax becomes a part of life – but not always right away. In South Africa, you are generally required to register as a taxpayer with SARS (South African Revenue Service) if your taxable income exceeds the annual tax threshold. For the 2025 tax year, this threshold is at R95 750 for those under 65. This figure changes annually, so it’s always a good idea to confirm the latest details on the SARS website.

If you’ve recently graduated and landed your first job, your employer will usually handle your PAYE (Pay As You Earn) tax registration, deducting the tax directly from your salary.

However, if you’re freelancing or completing internships without PAYE, or earning from other sources (like a side hustle), the responsibility to register falls on you.

The good news is that it is a straightforward process. You can easily register on the SARS eFiling platform, or you can visit a local branch with your ID, proof of address, and bank details.

Pro tip: Don’t wait too long to register – late registration can mean penalties if you owe tax.

Do I pay tax on money my family gives me?

If your parents, family or even close friends are helping you out financially – say, covering rent or giving you a cash boost while you settle into your first job – relax: this is not considered taxable income. In South Africa, gifts or personal support from relatives or those close to you fall under the donations tax rules. The recipient doesn’t pay tax, although the donor might, if their donation exceeds the annual limit of R100 000.

So, if Mom sends you R5 000 a month, you’re in the clear. But if you invest that money and earn interest or profits, that income could become taxable. To avoid complications, it’s wise to keep clear records distinguishing gifts from earned income, in case SARS requires clarification.

How do I claim medical contributions?

Medical expenses can help lower your tax liability if handled correctly. If you’re on a medical aid scheme and you are the main member of that scheme (maybe through your new job), you can claim a medical tax credit. For 2025, this is R364 per month for the main member, R364 for the first dependent, and R245 for each additional dependent (figures are subject to annual adjustments, so always check the SARS website for updates). These credits reduce your tax bill directly.

To claim the medical tax credit, you’ll need to file a tax return via eFiling once tax season opens (usually in July). Your employer’s IRP5 certificate or your medical aid’s tax certificate will provide the necessary details regarding your contributions; just upload these when prompted.

Bonus tip: If you’ve had significant out-of-pocket medical expenses, like glasses or a hospital stay, you might be eligible to claim additional deductions, but only if they exceed 7.5% of your taxable income for individuals below 65 years old. So, it’s worth consulting a tax expert if this might apply to you.

What about interest earned as a student?

If you’re a student with savings that are earning interest, here’s how it works: you get an interest exemption of R23 800 if you are under 65, or R34 500 if you are over 65. (Remember to confirm the latest figures on SARS’s website).

Say you earned R30 000 interest over the tax year. Subtract the exemption from the amount of interest you earned (R30 000 minus R23 800), and the result (R6 200) is taxable. If you earned additional income – say R10 000 – from a holiday job, your total income would be R40 000. After applying the exemption, your taxable income would be R16 200 (R40 000 minus R23 800).

However, you only owe tax if your total yearly income exceeds the estimated tax threshold of R95 750 (2025 estimate). Here, R40 000 is below that, so you don’t have to pay any tax yet.

But if your income were to increase, then you could become liable to pay tax. So if you are earning interest on savings, you should register on eFiling to report that interest. Banks do provide SARS with your earned interest, so it’s crucial to stay transparent!

What is eFiling, and how do I use it?

Your go-to platform for managing your taxes online is called eFiling. It’s where you can submit tax returns, check for refunds, or confirm if you owe any money to SARS (or if SARS owes you money). There’s no need to queue at a SARS branch!

Getting started is simple: visit the SARS eFiling website, click “Register,” and provide your ID number, email, and some personal details. SARS will verify your account, sometimes by phone or OTP.

Once registered, you’ll submit an ITR12 form each year. This form summarises your income, deductions, and tax credits. Your employer will submit an IRP5 (a document showing your salary and PAYE deductions) to SARS and supply you with a copy.

Tax season typically runs from July to November for salaried individuals, and eFiling offers a step-by-step guide through the whole process. If it’s your first time, consider watching a tutorial or asking a friend for help. Once you’ve done it, it’s surprisingly straightforward.

What does ‘assessment’ or ‘self-assessment’ mean?

After you submit your tax return, SARS “assesses” it by reviewing your calculations to determine if you’ve underpaid or whether you qualify for a refund.

For most new employees, this is automatic: your PAYE contributions already cover most of your tax liability, and eFiling simply confirms it. In some cases, you might receive a refund if too much tax was deducted, or you could owe more if there’s a shortfall.

“Self-assessment,” on the other hand, applies if you’re not on PAYE – for instance, if you’re a freelancer or have extra income such as interest from savings. In these scenarios, you calculate your own tax and submit it via eFiling, often with provisional tax payments twice a year (August and February).

Once SARS completes the assessment, they’ll issue an ITA34 notice, called an Original Assessment, summarising the outcome. Be sure to keep it as proof of your tax status – it indicates whether you owe more tax or are due a refund.

Paying tax is certainly not be the most thrilling part of starting your first job, but it doesn’t have to be daunting. From registering with SARS to figuring out eFiling, it’s all about staying on top of what you earn and what you can claim.

My top tips? Create your eFiling profile sooner rather than later, track all sources of income (even gifts or interest), and don’t hesitate to seek help. SARS has a helpline, and there are plenty of free resources online. As you settle into work, mastering these basics will keep you on the right side of our tax laws, stress-free and financially savvy.

Welcome to the workforce – tax and all!

This post was based on a press release issued on behalf of Hobbs Sinclair Advisory.

The low 2.9% GEPF pension increase has created an outcry among GEPF pensioners. Many point out that the National Treasury used an annual inflation rate of 4.4% for the budget. So why are pensioners only receiving 2.9%?

I wrote an article in News24 explaining how pension funds use the inflation rate and how the date of the review matters.

The GEPF uses the November year-on-year price changes to determine the pension increases. It just happened that in 2024, the November year-on-year CPI rate was 2.9%. Yet in June the increase in inflation was 5.1% year-on-year.

The drop in the year-on-year inflation rate in November was largely due to the difference in the fuel price between 1 December and 30 November.

I commented that this led to a “lotto” system as the increase was affected by the review date.

Find more articles on the GEPF here

Brian Karidza, Head of Actuarial & Benefits Administration Services at the GEPF, wrote to me to explain that while there may seem to be a “lotto” effect, it still works out the same over time.

“I would like to provide some context and a detailed example to explain why the differences in increases between funds may not be as significant as they appear at first glance,” Karidza wrote.

What follows below is the GEPF’s detailed explanation of how the increase works.

The GEPF’s explanation

The feeling that pension increases are a “lotto” is understandable, but the GEPF does not fully agree with this view. This situation is similar to that of companies with different financial year-ends. If you compare investment performance over a year for companies with different end-of-year dates, you might get different values, even if both companies are performing well.

Pension increases work in a similar way – the increase amount depends on the specific increase date and the inflation measure used. What is important is to look at performance over a sufficiently long period.

Let’s illustrate this with an example. Consider two funds:

• Fund A grants increases in April based on the previous November year-on-year inflation.
• Fund B grants increases in September based on the June year-on-year inflation in that year.

Assume a pensioner started with a pension of R100 on 1 January 2021. If the pension were increased each month by the monthly inflation experienced in South Africa, it would grow to R124.47 by 1 April 2025. Now, let’s examine what would happen in Fund A and Fund B:

Now, let’s look at this in more detail. Both Fund A and Fund B provide amounts higher than the R124.47 that would result from monthly inflation adjustments by 1 April 2025. In most cases, Fund B will have a lower pension amount from April to August each year compared to Fund A, but it will be higher for the remainder of the year. If we look at total payments over the period from 1 January 2021 to 31 March 2025:

• Fund A would have paid a total of R5 728.48.
• Fund B would have paid a total of R5 709.32.

This means Fund A actually pays 0.34% more in total than Fund B over the same period. While this is a simplified example, it demonstrates that differences in payment amounts based on the timing of increases are often small when viewed over a longer period.

Unfortunately, members are not always prepared to conduct such detailed analyses, which can lead to the incorrect view that some funds are significantly better or worse than others.

It is true that many pensioners are struggling to keep up with the cost of living, but this is likely more related to having low savings at retirement rather than pensions not keeping pace with inflation. This is an aspect that is often overlooked.

To avoid nasty surprises such as frozen bank accounts or getting stranded abroad, South African residents need to understand South Africa’s exchange control regulations.

Well over 300 000 South Africans embarked on international trips during early 2024, according to a Stats SA International Tourism report published in May 2024.

With so many South Africans travelling abroad, there is often confusion surrounding what they can and cannot do when utilising their local banking facilities abroad.

Whether travelling abroad for leisure or exploring potential emigration opportunities, complying with South Africa’s banking and exchange control regulations, as enforced by the South African Reserve Bank (SARB), is critical.

To avoid nasty surprises such as frozen bank accounts, or being stranded abroad, here’s a breakdown of some of the most prevalent misconceptions.

1. The end of the single discretionary allowance (SDA)

Myth: The R1 million single discretionary allowance has been abolished.

Fact: While it is true that the former R200 000 annual allowance for residents under the age of 18 has fallen away, the SDA for resident adults (18 years and older) remains in place. Every South African resident adult is still permitted to transfer up to R1 million overseas per calendar year under the SDA.

For larger transfers, individuals may also access an additional foreign capital allowance (FCA), coupled with an approval for international transfer (AIT) tax compliance status (TCS) PIN, allowing transfers up to R10 million.

Anything beyond this threshold requires pre-approval from SARB for international transfers.

Also read: Move away from exchange control

2. Holiday expenditures don’t affect the SDA

Myth: Spending money abroad on holiday and travel expenses does not impact your SDA.

Fact: Holiday spending abroad is indeed considered part of your SDA. South African resident adults’ travel expenditure will accordingly eat into their SDA. Residents over 18 can use up to R1 million for travel abroad. In contrast, residents who are under the age of 18 are restricted to a travel allowance capped at R200 000 annually.

Proof of identification, as well as a passenger flight ticket is required to authorise foreign spending. However, no approval or documentary evidence is required for travel expenditure inside the Common Monetary Area (eSwatini, Lesotho, Namibia and South Africa).

It’s important to remember that foreign currency cannot be bought more than 60 days before departure and must be used only for the declared purposes. Unused currency must also be converted back to rand within 30 days of returning.

3. Unlimited credit card transactions abroad

Myth: Credit card transactions abroad are unlimited.

Fact: The SARB has strict controls on foreign currency payments by means of local credit cards. A single transaction cannot exceed R50 000. While small purchases are allowed, splitting larger transactions to bypass this limit is prohibited.

Residents should be aware that breaching these limits can result in unforeseen and problematic consequences, such as bank account freezes, particularly if SARB deems the breach intentional.

4. Individuals can approach SARB directly

Myth: South African residents can directly approach SARB for approval on foreign transactions.

Fact: SARB does not engage directly with individuals. Individuals must route any requests through an authorised dealer (AD), which is a local bank registered under the Banks Act, No. 94 of 1990, as amended; and approved to handle foreign exchange transactions.

SARB’s Financial Surveillance Department will only accept applications submitted through local ADs, which act as an intermediary. Due to the subtle technicalities involved, anyone seeking to remit funds abroad is advised to partner with experienced exchange control specialists, to ensure a compliant and seamless experience.

5. Funds invested abroad fall outside of SARB scrutiny

Myth: Once funds are remitted and invested abroad, SARB regulations fall away.

Fact: For those resident investors seeking to capitalise on foreign markets, it is critical to note that cross-border transactions exceeding the FCA will bear an on-going compliance burden. In these circumstances, ADs will require annual reports on asset classes invested in and the updated values thereof.

The purpose of this oversight is to track capital outflows, balance-of-payments and statistical information. Where these funds are invested in global shares, mutual/index funds or ETFs, there may also be deemed capital gains tax implications in the event of future emigration from South Africa.

Navigating SARB’s exchange control regulations

While the South African Reserve Bank’s exchange control rules are designed to maintain financial order, their complexity often leads to confusion. Misconceptions around allowances, credit card usage, approvals required, and the reporting of overseas transactions can easily lead to costly mistakes.

Staying informed and working with seasoned exchange control practitioners will ensure compliance and avoid delays.

This post was based on a press release issued on behalf of Tax Consulting SA.