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1 Calculate Deon's net wages for the week. Show all workings. 2.2 Calculate the employer's contribution for the week.

Accounting

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3 parts
2.1

R5,294\text{R5,294}

2.2

R1,044\text{R1,044}

2.3

R2,800\text{R2,800}

Step-by-step solution

7 steps

Here are the solutions to the questions:

Part 2.1· 3 steps

Calculate Deon's net wages for the week. Show all workings.

  1. Calculate Deon's gross wages for the week.

    • Normal hours worked: 40 hours
    • Normal time rate: R130 per hour
    • Normal wage: 40 hours×R130/hour=R5,20040 \text{ hours} \times R130/\text{hour} = R5,200
    • Overtime hours worked: 52 hours−40 hours=12 hours52 \text{ hours} - 40 \text{ hours} = 12 \text{ hours}
    • Overtime rate: 1.5×R130/hour=R195/hour1.5 \times R130/\text{hour} = R195/\text{hour}
    • Overtime wage: 12 hours×R195/hour=R2,34012 \text{ hours} \times R195/\text{hour} = R2,340
    • Gross Wages: R5,200+R2,340=R7,540R5,200 + R2,340 = R7,540
  2. Calculate total deductions from Deon's wages.

    • SARS - PAYE: 20% of gross=0.20×R7,540=R1,50820\% \text{ of gross} = 0.20 \times R7,540 = R1,508
    • JB Pension Fund: 7.5% of basic=0.075×R5,200=R3907.5\% \text{ of basic} = 0.075 \times R5,200 = R390
    • Bonita Medical Aid Fund: R280R280
    • Unemployment Insurance Fund (UIF): 1% of basic=0.01×R5,200=R521\% \text{ of basic} = 0.01 \times R5,200 = R52
    • Union Fees: R16R16
    • Total Deductions: R1,508+R390+R280+R52+R16=R2,246R1,508 + R390 + R280 + R52 + R16 = R2,246
  3. Calculate Deon's net wages.

    Net Wages=Gross Wages−Total Deductions\text{Net Wages} = \text{Gross Wages} - \text{Total Deductions} Net Wages=R7,540−R2,246=R5,294\text{Net Wages} = R7,540 - R2,246 = R5,294

    Deon's net wages for the week are R5,294\boxed{\text{R5,294}}.

Part 2.2

R1,044\text{R1,044}

Calculate the employer's contribution for the week.

  1. Calculate each employer's contribution.

    • JB Pension Fund: 10% of basic=0.10×R5,200=R52010\% \text{ of basic} = 0.10 \times R5,200 = R520
    • Medical Aid: R1.50 for every R1 contributed by employee=R1.50×R280=R420R1.50 \text{ for every } R1 \text{ contributed by employee} = R1.50 \times R280 = R420
    • UIF: 1% of basic=0.01×R5,200=R521\% \text{ of basic} = 0.01 \times R5,200 = R52
    • Skills Development Levy: 1% of basic=0.01×R5,200=R521\% \text{ of basic} = 0.01 \times R5,200 = R52
  2. Calculate the total employer's contribution.

    Total Employer’s Contribution=R520+R420+R52+R52=R1,044\text{Total Employer's Contribution} = R520 + R420 + R52 + R52 = R1,044

    The employer's contribution for the week is R1,044\boxed{\text{R1,044}}.

Part 2.3

R2,800\text{R2,800}

Calculate the total amount that the business will submit to the Medical Aid Fund on behalf of Deon Martin for the month of April 2022. (4 weeks)

  1. Calculate the total weekly contribution to the Medical Aid Fund.

    • Employee's weekly contribution: R280R280
    • Employer's weekly contribution: R420R420 (from 2.2)
    • Total weekly Medical Aid contribution: R280+R420=R700R280 + R420 = R700
  2. Calculate the total monthly submission for 4 weeks.

    Total Monthly Submission=Total Weekly Contribution×4 weeks\text{Total Monthly Submission} = \text{Total Weekly Contribution} \times 4 \text{ weeks} Total Monthly Submission=R700×4=R2,800\text{Total Monthly Submission} = R700 \times 4 = R2,800

    The total amount the business will submit to the Medical Aid Fund for April 2022 is R2,800\boxed{\text{R2,800}}.

Part 2.4

Why would it not be possible to accurately estimate the total tax amount due to SARS on behalf of Deon Martin?

It would not be possible to accurately estimate Deon Martin's total tax amount due to SARS because the business only has information about his wages from them. Deon's total tax liability depends on his annual income from all sources, as well as any other personal tax-deductible expenses or rebates he may qualify for, which the business would not know. Additionally, his gross wages can fluctuate due to overtime, making a weekly PAYE deduction an estimate for that period, but not for his full annual tax assessment.

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