What Happens to Your Salary When You Die in South Africa?
The topic of death is such a sensitive issue but some questions are necessary for preparation of the future, so what happens to your salary when you die in South Africa? In this discussion, we will bring light to how things like salaries, benefits, and legal processes are handled should you die while still working for a company.
What Happens to Your Salary After Death in South Africa?
Upon a South African employee’s death, their salaries automatically becomes part of their estate, including
- Any unpaid days worked up until death.
- Any outstanding payment for an accumulated leave.
- Any bonuses stated in the employment contract.
In compliance with the South African law, the employer must pay the deceased employee’s salary and any benefits directly into their estate and not the family members.
Who Receives Your Salary And Benefits After Death In South Africa?
Money distribution will depend on whether the deceased has a valid will or not.
If There is a Will:
- Everything that needs to be paid out will be distributed following the will’s instructions.
- After the administrator of the estate pays the deceased person’s taxes and debts, they will distribute the rest to the beneficiaries according to the will.
If There is No Will:
- When someone passes away without a will, a court distributes properties, including the salary, according to the Intestate Succession Law.
- A judge will decide who will be the priority, but the order goes from surviving spouse or domestic partner, a child, a grandchild, parents, or siblings.
How Long Does It Take to Receive the Salary?
- In cases where there are no complications and the deceased estate is small, then the beneficiaries may receive the money within 6 to 12 weeks.
- Complex estates with contests may take from months to years.
What Deductions Are Subtracted from the Final Salary?
Before the salary get paid to the estate, they might charge
- Tax deductions
- Any Debt repayments or loans tied to their salary
- Any Pension or UIF contributions required by the law
What About Pensions or Provident Funds?
As a South African employee, benefits like pensions or provident funds are not part of the salary that is paid out to the estate when you are deceased.
1. Pension or Provident Funds are
- Directly paid to nominated beneficiaries.
- The Pension Fund Act makes sure that the beneficiaries receive their shares accordingly if there were multiple of them.
2. Unemployment Insurance Fund (UIF)
- Family members close to the deceased may claim benefits with the UIF.
- Close family members like a spouse, the deceased’s children, or nominated beneficiaries may claim benefits.
What is the Employer’s Responsibility When You Pass Away?
- Make sure that you notify the next of kin stated on the contract.
- After the necessary deductions, transfer the net salary to the estate.
- Assist the estate administrator with the necessary documents.
What Should You Do as a Family Member?
To access your loved one’s salary and benefits after they pass away, you must:
- Register for a death certificate with Home Affairs.
- If there is no valid will, apply to the court to appoint an estate executor
- Contact the employer, inform them of the death, and provide the death certificate and ID.
- File for UIF, pension funds and any other benefit to claim them.
How to Plan for Your Loved Ones’ Financial Security
As an employee in South Africa, take the following steps to make sure you secure a financial plan for your loved one’s future in case you pass away.
- Make a plan for a valid will where you specify how your salary and assets should be distributed.
- For additional benefits like pension funds and providing funds, nominate your beneficiaries and write them down with the percentage of the shares.
- For extra financial support, get life insurance.
- Update your records regularly after and make sure your current will reflect your current feelings.
Conclusion
When an unfortunate event happens, like the death of an employee in South Africa, their salary will be part of their estate and will be distributed according to the law. Usually your final salary pays your outstanding debts, and the rest will be distributed to the nominated beneficiaries accordingly. With the right paperwork and following the right steps, the employers and executors will make sure that your money is paid out to the right people. By creating a will, nominating beneficiaries, and applying for life insurance, you will make sure your family is set for life financially even after you pass away.
