Retirement tax calculation
I contribute 7.3 percent and my employer contributes 13.5 percent of my pensionable salary (R500 000 a year) to my pension fund. I also contribute R12 000 a year (about 2.5 percent of non-pensionable salary) to a retirement annuity (RA) fund.
Recently, my RA provider informed me that individuals can now deduct up to 27.5 percent of their total remuneration in respect of contributions to pension, provident and RA funds, subject to an annual cap of R350 000. In my case, how would the 27.5-percent deduction be calculated? Name withheld