How to make the most of your employee benefits

If you work for a company, you've probably sometimes looked at your payslip and lamented how much gets deducted before the money that remains lands in your bank account.

It's the case that many people complain about these deductions from their salaries without actually understanding the potential benefits, says Warren Ingram.

"Yes, some of the money goes to SARS - that's paying our dues, but there could be quite a bit going to things that are entirely for our benefit as employees. We're so focused on what gets into our bank accounts that we miss the fact that maybe our employers are paying quite a bit of money for us into the things that matter now, for example to medical aid, but that also matter to our retirement like our pension funds."

Your benefits are often what quietly build your wealth in the long run, Ingram says.

"Pay more attention to these benefits to ensure you can retire comfortably one day."

Your retirement fund is bigger than it looks

If your employer offers a pension or provident fund, you're likely contributing somewhere between 5% and 15% of your salary. In many cases, your employer is matching some or all of your contribution which is essentially extra income that has already been set aside for you.

Ingram suggests you review your latest fund statement and focus on three key aspects: your contribution amount, your employer’s contribution, and the investment allocation of your funds. If you're under 50 and have been in the default investment option since you started, it’s likely the fund is too conservative and may not be growing your wealth as efficiently as possible.

Group risk cover you might already have

Most retirement funds in SA typically offer group life cover, disability cover, and sometimes a funeral benefit. The coverage usually amounts to a multiple of your annual salary, commonly ranging from three to five times.

This is important for two reasons, says Ingram. Firstly, your employer might already provide sufficient life cover, so the R1,500 monthly policy you pay for separately could be reduced or cancelled. Secondly, remember that this coverage ends when you leave your job and make allowance for that.

Medical aid subsidies and group rates

If your employer subsidises your medical aid, that subsidy can easily be worth a few thousand rands per month, Ingram points out. Even where there is no subsidy, employer-arranged group rates are often cheaper than what you'd pay if you bought the same plan as an individual.

Compare your current contribution with the rate for the same plan if purchased directly. This difference reflects a genuine part of the benefit of employment, something most people rarely consider.

Scroll up to the audio player to listen to Ingram's detailed advice