Friday morning my wife was in tears. I just got a text from her stating that she got her paycheck and it’s significantly lower than it was last month. This came as a huge surprise to me and her but we had a feeling that it could happen.
Not sure how health insurance works every where else in the world, but here we pay a monthly fee based on which package you select. You pay half and your employer pays the other half. Not all companies have this benefit and this benefit is not compulsory for employee for those companies that do offer it.
Last month my wife and I compared our medical aids (health insurance) and concluded that it would be more cost effective if I were to cancel my medical aid with my company and then she adds me to her medical aid as a dependent. We scrutinized her paycheck and saw that even if I were to be added to her medical aid, her company will cover that and then she would still get the same salary after taxes and deductions.
This was not the case though. She inspected her paycheck once again to find her mistake. Her basic salary decreased because I was added to her medical aid. I save $500 per month but she loses $700 per month. That would’ve been fine if it ended there, but it didn’t.
Mrs Lakendary’s employer also made a mistake in her taxation calculation. Again, I’m not sure how the rest of world pay taxes, but here we pay something called Pay As You Earn (PAYE) which is a monthly tax payment instead of one big lump sum payment each year. Then at the end of the tax year, you reconcile what you’ve actually paid over the tax year and deduct what you were supposed to pay and pay or receive back the difference.
Now that her taxation was wrong, she’s been paying too little tax for the past 11 months, so not only is she earning a lot less each month from now on, she might also have to make a huge tax payment come the end of the tax year (29 February 2016).
We had plans to visit my parents at the coast for a week and maybe get a new car a couple of months down the line. It still looks like we might be going to the coast even with that financial setback, but the car is definitely out of the question until one or both of us gets a significant raise.
Well this weekend we decided to spoil ourselves by buying cheap decorative things for our place because we’ve been living there for close to 3 months but it still doesn’t feel like home. It did help lift our spirits. This only made us stronger. Next time we will be fully prepared for something like this.
Thanks for reading. Until next time.