Group Benefits - Can I afford them?

How Can I Afford Group Benefits? It is quite possible that a compulsory national retirement savings scheme could be introduced in the near future and we would suggest you would be better off with your own private scheme where you control benefits and costs As an example and purely for ease of numbers I am going to use the following figures as an example: •  Turnover of R1 million per month •  Payroll of R100 000.00 per month The cost to the company involves paying a set percentage of salary into the retirement vehicle and an amount to cover group life, group disability and the fund management fees . This would normally come to approximately 10 percent of payroll or in this example would be equal to R10 000.00 per month. If you divide the cost of R10 000.00 per month by the turnoverof R1 000 000.00 per month then the percentage works out to be exactly 1%. This means that for each one Rand that you charge a customer you must add in one cent and with your turnover of R1 000 000.00 you will have collected enough to cover costs of the benefits for the month. Should your turnover be R2 million per month then the requisite increasein your cost of product need only be a half cent per Rand. In most cases a turnover increase of 1% will cover the cost of the extra benefits for yourself and your staff.

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