The NSSO Accepts An Alternative Calculation Method For The Seniority Bonus
Originally Published 12th March 2009
For a considerable period of time now the National Social
Security Office (NSSO) accepts that employers award a seniority
bonus to their employees after 25 or 35 years of service. This
premium is exempt from social security contributions and is
calculated as follows:
at 25 years of service: 1 x gross monthly pay;
at 35 years of service: 2 x gross monthly pay.
Initially the seniority bonus was always calculated on the basis
of the gross salary of the employee concerned. Now, the NSSO has
inserted an alternative calculation method in its instructions.
This alternative method allows the bonus to be based on the
average gross amount of a monthly salary in the company. According
to the NSSO, this indicates the proportion between the wages that
have been paid out and the amount of full time equivalents during
the previous calendar year.
Employers must however choose between both options. The
application of both calculation methods during one calendar year
results in the loss of the exemption from social security
contributions of all seniority premiums that have been awarded
To continue readingREQUEST YOUR TRIAL