A payslip can look like a wall of numbers the first time you actually try to read it properly rather than just checking the final figure. This lesson walks through what each line actually means — this lesson focuses on what each deduction is and why it exists, not on how PAYE itself is calculated, which the next lesson covers through the tax bracket system.
Gross salary: the starting point
Gross salary is your full salary before any deductions — the number in your employment contract. Nothing on a payslip below this line is "extra" being taken from you unfairly; every deduction below is either a tax owed by law or a contribution you or your employer chose to make.
PAYE: tax deducted at source
Pay-As-You-Earn (PAYE) is income tax, deducted directly from your salary each month by your employer and paid over to SARS on your behalf, rather than you paying it in a lump sum once a year. It's an estimate of your annual tax liability, spread across twelve months — which is part of why a tax return (lesson 1) sometimes results in owing more or getting a refund, if your actual annual position differs from what was deducted monthly.
UIF: unemployment insurance
The Unemployment Insurance Fund (UIF) is a separate deduction from PAYE — it funds unemployment benefits, not general tax revenue. It's calculated as 1% of your gross salary, matched by an equal 1% contribution from your employer, and it's capped at R177.12 per month on the employee side, regardless of how high your salary is above the threshold where that cap kicks in.
Retirement fund contributions
If you belong to a workplace pension or provident fund, your contribution appears as a deduction here too — this is money going into your own retirement savings, not a tax, and (as covered in the Retirement module) it's also tax-deductible, which is part of why contributing to a workplace fund can lower your PAYE deduction, not just build savings.
Medical aid contributions
If your employer facilitates your medical aid contribution through payroll, that appears as a deduction as well — again, not a tax, but a scheme contribution, and one that also affects your tax position via the medical tax credit, covered in lesson 4.
Net pay: what actually lands in your account
Net pay (or "take-home pay") is gross salary minus every deduction above. This is the number that matters for budgeting — which is exactly the number the Budgeting module's first lesson pointed to as the real starting point for a working budget, not gross salary.
For a full breakdown of exactly how PAYE itself is calculated from your gross salary through the tax bracket system, see the linked article below.