Good morning everyone, how do I apply the below to the payroll and which IRP5 code do I use for the earning.

• In order to fund this, the company agrees to give the employee a special salary increase. The increase is taxed in the employee’s hands, and deductible to the company as normal salary.
• The increase is calculated so that the after tax contribution will equal what needs to be contributed to the plan. For example, if the company wishes to pay an amount of R1 000 per month into the plan,   they would have to give the employee an increase of roughly R1 650, so that after tax is deducted (assuming a 40% tax rate), the employee would clear R1 000 to contribute.
• The company and employee agree that while the employee will get a salary increase of (say) R1 650 per month, the employee will be obliged to contribute the after-tax amount of R1 000 to a five-year endowment policy.
• The contribution amount needs to then be deducted from the employee as a non-taxable deduction (I created a sundry non-taxable transaction type of Pastel and named it Preferred Compensation).

This is how I understand it