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Holiday Pay Scheme

The Master Builders KwaZulu Natal offers an Annual Leave Pay Scheme designed to protect the Employer’s cash-flow and ease the year-end administrative burden.

Either weekly, bi-weekly or monthly, the Employer makes a contribution towards each employee’s annual leave pay provision. Administration is via a user-friendly and innovative stamp scheme (which also integrates with the 2 Funds).

At the end of the year, the Association will pay the Employee his or her leave pay and refund the Employer the interest earned on the money during the year!

How does it operate?

For each week that an employee works, his employer buys him a stamp. (the “stamp” is in fact an electronic unit, as all data is computerised and the “stamp” terminology has been retained for simplicity and continuity). The category of stamp, which is purchased for the employee, will depend on their hourly wage rate and what kind of benefit the employer wishes to give them.

For example:
If a worker is paid R20 per hour they would be bought a stamp which matches that wage rate i.e. Category 110, 210, 310, 410 etc. (See attached schedule) The kind of stamp they would be given, would depend on which series of stamp their employer selected. There are 8 Series of stamps available at present which contain:

Series 1: Annual leave pay (15 working days).
Series 2: Annual leave pay, holiday allowance, (15 working days leave plus 7.5 working days holiday allowance. A total of 22.5 days pay).
Series 3: Annual leave pay, holiday allowance (series 2) and KZN Retirement Fund contributions (series 6).
Series 4: Annual leave pay, holiday allowance (series 2) and KZN Provident Fund contributions (series 5).
Series 5: KZN Provident Fund contributions only.
Series 6: KZN Retirement Fund contributions only.

Series A: Annual leave (series 1) and KZN Provident Fund contributions (series 5).
Series B: Annual leave (series 1) and KZN Retirement Fund contributions (series 6).
Series 3, 6 and B stamps contain Pension Fund contributions. This Pension Fund is the KwaZulu-Natal Retirement Fund, which is administered by the KwaZulu-Natal Master Builders & Allied Industries Association.
Series 4, 5 and A stamps contain Provident Fund contributions. The Provident Fund is the KwaZulu-Natal Provident Fund, which is administered by the KwaZulu-Natal Master Builders & Allied Industries Association.The holiday pay value of each stamp is calculated so that 48 stamps will constitute a full year, i.e. an employee with 48 stamps will receive, at year end, a payment which will be equivalent to 15 working days pay plus holiday allowance of 7.5 days, where appropriate. The stamp year runs from November to October every year. Once an employer has purchased stamps for a full year the Association will pay each employee, normally in December. The payment will be for the full amount of holiday pay due against the stamps purchased. No income tax is deducted. It follows, therefore, that any income tax payable must be deducted by the Employer from each Employee at the time their stamps are purchased.