Two-Pot Retirement System & Payroll

The savings component receives one-third of qualifying new contributions and the retirement component receives two-thirds. Existing vested benefits remain subject to their applicable rules, including the system's once-off seeding arrangements.

Member exceptions and fund-specific implementation rules can apply. Payroll must continue using the fund's approved contribution schedule rather than treating the two-pot split as an extra employee deduction.

A member generally requests a savings withdrawal from the retirement fund or administrator, not the employer. A minimum withdrawal and sufficient available balance apply, and withdrawals are generally allowed once per tax year per fund.

The administrator requests a SARS tax directive. Savings withdrawals are taxed at the member's marginal income-tax rate rather than the retirement lump-sum table; the final annual assessment can differ from the amount withheld.

The fund normally pays the withdrawal and implements its SARS directive. Payroll should not independently pay or tax a fund withdrawal as ordinary salary.

Where payroll is responsible for a payment covered by a directive, it must apply that directive exactly, retain the reference and supporting records, and use the required reporting treatment. Never substitute a calculator estimate for a valid directive.