# Regulatory Compliance Category > Labour Relations and Legislation Forum >  TCoE (total cost of employment) advice for employees

## rozzer

Hi 
Can anyone advise or direct me to an area where i can get advice 
on a pay package breakdown (TCoE) and how it works or how i can 
decide if a job as acceptable.
Your help is really appreciated

Best regards 

Rozzer

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## Dave A

I take it you've been given a fairly complex offer then.
What are you struggling with evaluating?

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## rozzer

Hi Dave A

It's not actually for me but for my daughter and she is reluctant to leave one job for another one 
when she is unsure of the NETT salary.
TCoE is, a far as I am concerned very misleading to say the least and is weighted towards the 
employer.
If a total package is say for e.g  R400.000.00 per annum.
A pension or Provident              R25.000.00
Medical                                  R45.000.00
13th cheque                           R25.000.00
What would be her monthly take home pay and is there a formula or method which is 
used as a standard to work these packages out?

Thanks for your input and advice

Kind regards 
Rozzer

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## rozzer

By the response it seems I'm not the only one who is unsure of how
the TCoE set up works.

Rozzer

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## CLIVE-TRIANGLE

Hi Rozzer
It is quite simple really. Lets call the TCoE company A and the competing company B.

Assuming that that B is offering a salary and a range of perks, while A is offering a TCoE number:
Take the number offered by A and deduct the perks offered offered by B. If the remaining result exceeds the salary offered by B, then it is a better offer. That's all there is to it.

Also, what A is saying is that they are flexible and are prepared to structure your package according to your needs, provided the total cost to them is fixed; not everybody's needs are the same.

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## rozzer

Hi Clive-Triangle

Your analysis of the situation and solution is fine but in my case the existing 
company is on a contract basis and not really able to compute the results 
the same, I have already done a simple exercise similar to yours but a standard 
formula is what I'm really looking for. this will also assist for future opportunities.

Thanks for your input 

Kind regards Rozzer

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## Dave A

I'm used to just plugging in the details into a payroll program of late - and after scratching around to process your example manually - gee, it's getting complicated nowadays!

Let's run over a few things:
There is a substantial difference between the handling of Pension and Provident Fund contributions - Pension Funding contributions are tax deductible, Provident Fund contributions are not. This would affect where you would put this budget allocation on the payslip.

So what'll it be? Pension/Retirement Annuity or Provident Fund?

On the medical calculation - Marital status and how many dependants?

Then - what about a travel allowance? Would you want a travel allowance built into the package? If yes, how much?

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## CLIVE-TRIANGLE

rozzer, if you are doing this on a regular basis, it may be worth your while to get a package that does the calculations for you. I use BackTax, have a look and see if it meets your needs. You can read up here

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Dave A (15-Jul-13)

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## rozzer

Hi Dave & Clive

Thanks for your input and advice, however I have done some searching on the web
and it is obvious that TCoE is definitely a design for the employer to ascertain the 
the cost of a particular post and not suited for the employees needs.
It also appears that this system is slowly fading out in favour of a simpler system.
It really boils down to checking and double checking what you are being offered
before accepting anything as not everything is in black and white in the formula!!

Regards 

Rozzer

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