G6
Calculating Leave Pay for Commission Earners
(Annexure H of the Main)
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ANNEXURE H CALCULATING LEAVE PAY for COMMISSION EARNERS In terms of legislative changes employees’ Leave Pay MUST be calculated on their TOTAL Remuneration which, in the case of commission-earners, INCLUDES Commission Earnings. We should therefore like to inform YOU that the National Offices of UASA (the Union) and EOHCB (the Employers’ Organisation) recently negotiated and AGREED that an Average Personal Services Commission of 20% (based on commission earned during the preceding 12 months) ALSO be used when calculating LEAVE PAY for Commission-Earners, in addition to the current normal Leave Pay (calculated on the Basic Salary). This is effective on the entire industry on a NATIONAL basis with effect from the 1st March 2006. NOTE: PSC (Personal Services Commission) means Commission paid to Employees for services rendered and does NOT include Retail Commission.
In
order to assist Employers with these Calculations we list some Examples
hereunder: |
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EXAMPLE ON LEAVE PAY CALCULATION: |
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Step 1: Add up last twelve months commission earned (before normal deductions): |
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| Example: | ||
| May 05 | - | R3015-00 |
| June 05 | - | R4500-00 |
| July 05 | - | R3000-00 |
| August 05 | - | R2500-00 |
| September 05 | - | R2700-00 |
| October 05 | - | R4250-00 |
| November 05 | - | R2000-00 |
| December 05 | - | R 350-00 |
| January 06 | - | R1500-00 |
| February 06 | - | R1600-00 |
| March 06 | - | R1750-00 |
| April 06 | - | R5000-00 |
| Total: | R32165-00 | |
| Step 2: | ||
| Total R32 165-00 ÷ 12 = R2680-42 (Average) | ||
| Step 3: | ||
| Average R2680-42 X 20% = R536-09 | ||
| Step 4: | ||
| R536-09 ÷ 26 = R20-62 (Daily rate) | ||
| Step 5: | ||
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R20-62
(Daily rate) X 18 (Amount of days leave) = R371-16 R371-16 amount of leave pay payable on commission. |
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| Step 6: | ||
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Calculation
on basic salary: Basic: R4439-00 ÷ 26 = R170-73 (Daily rate) R170-73 X 18 (Amount of days leave) = R3073-14 R3073-14 amount of leave payable on basic. |
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| Step 7: | ||
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Add the
commission calculation: R 371-16 and The basic salary calculation: R3073-14 TOTAL LEAVE AMOUNT TO BE PAID: R3444-30 If they take 7 days or less and it will not affect their commission for the month then you only pay them on the basic salary. Even if they don’t earn a basic you MUST still do the calculation on the prescribed basic salary. |
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