Key Highlights from the 2024/2025 Budget Speech: Impact on Your Taxes and Retirement Planning

The reactions to the 2024/2025 Budget speech have been quite varied, reflecting a broad spectrum of opinions across different sectors and political affiliations.

The impact of the tax tables not changing to align with inflation in the 2024/2025 budget speech could potentially exacerbate the financial burden on individuals and businesses.

Without adjustments for inflation, taxpayers might find themselves effectively paying more tax due to ‘bracket creep,’ where inflationary salary increases push them into higher tax brackets without a real increase in purchasing power. This could further strain disposable incomes and possibly discourage investment at a time when economic growth is already under pressure.

A pivotal change announced is the implementation of the Two-Pot Retirement System, set to commence in September 2024. This innovative approach to retirement savings will allow individuals greater flexibility in managing their retirement funds, with one pot for long-term savings and another for more accessible, short-term needs. This system represents a significant shift in retirement planning, offering both challenges and opportunities to enhance your financial security in retirement.

As we digest these updates, our team at LabourNet is here to guide you through the implications of these changes on your financial and payroll strategies.

Stay tuned for our upcoming webinars and consultations, where we will delve deeper into these topics and answer any questions you may have. Your financial well-being is our top priority, and we are committed to helping you adapt and thrive amidst these changes.

Two very important items that need to stay on every payroll professional’s radar are:

• The “Two Pot” retirement system.
• The looming monthly submission of employee earnings, deductions, and tax-related data to SARS.

• Medical Aid Tax Credits has remained unchanged to R 364 for each of the first two dependents and R 246 for each additional dependant thereafter.

Subsistence Allowance

• Meals and incidental costs, an amount of R548 is deemed to have been expended per day; or
• Incidental costs only, an amount of R169 is deemed to have been expended per day.

Reimbursive Travel Rate

No updated have been communicated.