The importance of having a work-life balance

Having a job and a steady income plays a significant role in any person’s life, as it keeps us afloat and drives us to reach our full professional potential. However, when we have an unhealthy work-life balance, this can all come tumbling down.

An employee’s ability to establish and maintain a healthy balance between their work and personal commitments and responsibilities is referred to as a work-life balance. Companies have begun to recognise the importance of helping their employees to achieve this balance. Work responsibilities have also seen an increase recently and this leads to increased stress among employees as they struggle to find a balance between work and personal commitments.

Over the years, there have been dramatic changes in employees’ work patterns, as well as how and where they work. More and more companies have begun to embrace the digital and technological age, which means that work is no longer restricted to the workplace only. Technology enables employees to work anytime, anywhere, and from any internet-enabled device. This means that employees can be reached by employers and even clients 24/7, which makes achieving a healthy balance between work and your personal life even more difficult.

Having an unhealthy work-life balance has a negative effect on both employees and the companies they are employed by. Having an unhealthy work-life balance leads to high levels of stress which results in decreased productivity. Increased stress can also lead to health problems and absenteeism, which costs the company money. Finally, personal relationships and co-worker relationships amongst the employees can suffer, and lead to reduced job satisfaction.

Companies can implement various policies that will aid their employees in establishing and maintaining a healthy work-life balance. Many companies have started to provide their employees with flexible working hours, which helps employees shape and mould their work pattern to fit into their personal schedules. This reduces the conflict between professional and personal responsibilities significantly. Managers can also encourage their staff to use their annual leave, and set clear boundaries which state that staff should not respond to work-related emails and calls during non-working hours.

Finally, it’s not all about job satisfaction, personal satisfaction is equally as important. An employee’s ability to meet personal commitments has an enormous impact on their professional success. When employees have the opportunity to meet these personal commitments, it benefits the company, as the employee is not experiencing conflict between their professional and personal lives.

Helping employees establish and maintain a healthy work-life balance leads to increased job satisfaction as well as increased loyalty to their employer.

Once a company recognises the benefits of healthy work-life balance and implements policies to promote this balance, they will experience an enormous increase in productivity and increased retention of staff, which ensures that the company continues to thrive and succeed.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Depreciation vs wear & tear

Deterioration, obsolescence and wear and tear are among the reasons why assets decrease in value. By realising a deduction on depreciation for tax purposes, your company can recover the costs of certain moveable assets that are used in the production of income.

 

Generally, businesses won’t be able to make use of assets like heavy machinery or computer equipment, for example, for an indefinite period. As assets work together to generate an income for your business, over time these assets will have to be replaced with newer, more efficient ones. This article briefly looks at the basic concepts of depreciation for accounting purposes and wear and tear allowances for taxation purposes.

 

Depreciation – Accounting

 

Depreciation is essentially the decline in the value of an asset over time due to the wear and tear that occurs as a result of the normal use of that asset. For accounting purposes, a company’s assets should be depreciated on a systematic basis over the assets’ useful life. In addition, the depreciation method used should reflect the way in which assets’ economic benefits are utilised by the company and should also be reviewed regularly. The different methods of depreciation include: the straight-line method, reducing balance method as well as the production unit method.

 

For accounting purposes, depreciation is charged as an expense in a company’s income statement and is not deductible for tax.

 

Wear & Tear – Taxation

 

Wear and tear refers to the method in which the South African Revenue Services (SARS) allows companies to write off an asset for taxation purposes over a predetermined period. This wear and tear allowance permits companies to deduct, over a period of time, the amount that was paid for the movable goods that are used in the production of income. This deduction will result in a reduction of your company’s tax liability.

 

The period over which wear and tear can be claimed depends on the type of asset, as each asset will have a different write-off period. SARS has a prescribed schedule (Annexure A of Interpretation Note 47) for all assets, as well as predetermined rates at which companies can claim ‘depreciation’ for taxation purposes.

 

Any assets purchased for less than R7 000 may be deducted in full in the year in which the asset is purchased.

 

Recovering Wear & Tear Allowances

 

When an asset is sold, the wear and tear allowances claimed need to be recouped for that asset. The wear and tear claimed for the periods that the asset was in use is then added back to the taxpayer’s taxable income in the year in which the asset was sold.

 

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)