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Calculate Daniel's annual pension contribution and taxable income. His monthly gross salary is R$32,500 and his pension contribution rate is 7.5%. Use the provided tax table for calculation.

Accounting

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2.1.1

  1. Identify Daniel's monthly gross salary and his pension contribution rate.

    Monthly gross salary = R32 50032\,500.
    Pension contribution rate = 7.5%7.5\%.

  2. Calculate his monthly contribution towards pension.

    Monthly pension contribution=7.5%×R32 500\text{Monthly pension contribution} = 7.5\% \times \text{R}32\,500 Monthly pension contribution=0.075×R32 500\text{Monthly pension contribution} = 0.075 \times \text{R}32\,500 Monthly pension contribution=R2 437.50\text{Monthly pension contribution} = \text{R}2\,437.50

  3. Calculate his annual contribution towards pension.

    Annual pension contribution=Monthly pension contribution×12\text{Annual pension contribution} = \text{Monthly pension contribution} \times 12 Annual pension contribution=R2 437.50×12\text{Annual pension contribution} = \text{R}2\,437.50 \times 12 Annual pension contribution=R29 250\text{Annual pension contribution} = \text{R}29\,250

    His annual contribution toward pension is R29 250\boxed{\text{R29\,250}}.

    2.1.2

  4. Calculate Daniel's annual gross salary.

    Annual gross salary=R32 500×12\text{Annual gross salary} = \text{R}32\,500 \times 12 Annual gross salary=R390 000\text{Annual gross salary} = \text{R}390\,000

  5. Calculate Daniel's annual taxable income.

    Pension contributions are deductible from gross salary.

    Annual taxable income=Annual gross salary−Annual pension contribution\text{Annual taxable income} = \text{Annual gross salary} - \text{Annual pension contribution} Annual taxable income=R390 000−R29 250\text{Annual taxable income} = \text{R}390\,000 - \text{R}29\,250 Annual taxable income=R360 750\text{Annual taxable income} = \text{R}360\,750

  6. Calculate Daniel's normal tax payable using the tax table.

    Daniel's annual taxable income of R360 750360\,750 falls into the tax bracket R353 101353\,101 – R488 700488\,700.
    The tax formula for this bracket is R73 726+31%73\,726 + 31\% of taxable income above R353 100353\,100.

    Taxable income above R353 100=R360 750−R353 100\text{Taxable income above R}353\,100 = \text{R}360\,750 - \text{R}353\,100 Taxable income above R353 100=R7 650\text{Taxable income above R}353\,100 = \text{R}7\,650 Normal tax payable=R73 726+(0.31×R7 650)\text{Normal tax payable} = \text{R}73\,726 + (0.31 \times \text{R}7\,650) Normal tax payable=R73 726+R2 371.50\text{Normal tax payable} = \text{R}73\,726 + \text{R}2\,371.50 Normal tax payable=R76 097.50\text{Normal tax payable} = \text{R}76\,097.50

  7. Calculate Daniel's total rebates.

    Daniel is 53 years old, so only the Primary rebate applies.

    Total rebates=Primary rebate=R16 425\text{Total rebates} = \text{Primary rebate} = \text{R}16\,425

  8. Calculate Daniel's annual medical tax credits.

    Daniel (taxpayer): R347347 per month
    Wife (first dependent): R694694 per month
    Three children (additional dependents): 3×R234=R7023 \times \text{R}234 = \text{R}702 per month

    Total monthly medical tax credit=R347+R694+R702\text{Total monthly medical tax credit} = \text{R}347 + \text{R}694 + \text{R}702 Total monthly medical tax credit=R1 743\text{Total monthly medical tax credit} = \text{R}1\,743 Annual medical tax credit=R1 743×12\text{Annual medical tax credit} = \text{R}1\,743 \times 12 Annual medical tax credit=R20 916\text{Annual medical tax credit} = \text{R}20\,916

  9. Calculate Daniel's total annual tax payable.

    Total annual tax payable=Normal tax payable−Total rebates−Annual medical tax credit\text{Total annual tax payable} = \text{Normal tax payable} - \text{Total rebates} - \text{Annual medical tax credit} Total annual tax payable=R76 097.50−R16 425−R20 916\text{Total annual tax payable} = \text{R}76\,097.50 - \text{R}16\,425 - \text{R}20\,916 Total annual tax payable=R38 756.50\text{Total annual tax payable} = \text{R}38\,756.50

  10. Calculate Daniel's monthly tax payable.

    Monthly tax payable=Total annual tax payable12\text{Monthly tax payable} = \frac{\text{Total annual tax payable}}{12} Monthly tax payable=R38 756.5012\text{Monthly tax payable} = \frac{\text{R}38\,756.50}{12} Monthly tax payable≈R3 229.71\text{Monthly tax payable} \approx \text{R}3\,229.71

  11. Compare Daniel's monthly tax payable with 15%15\% of his monthly gross salary.

    15% of monthly gross salary=0.15×R32 50015\% \text{ of monthly gross salary} = 0.15 \times \text{R}32\,500 15% of monthly gross salary=R4 87515\% \text{ of monthly gross salary} = \text{R}4\,875

    Since R3 229.71<R4 875\text{R}3\,229.71 < \text{R}4\,875, Daniel's claim that his tax is more than 15%15\% of his monthly gross salary is incorrect.

    Daniel's claim is invalid\boxed{\text{invalid}}.

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