2.1.1. An IRP5 is the employee's tax certificate, detailing all the employee-related incomes, deductions, and related taxes. The IRP5 assists the employee in making his tax returns for the subsequent year.
2.1.2. Mr. Johnson's taxable income for the year is <u>R490,414,56</u>.
2.1.3 Mr. Johnson's medical credit for the financial year is <u>R33,600</u>.
2.1.4 The annual tax payable by Mr. Johnson for the financial year from 1 March 2021 to 28 February 2022 is <u>R118,988,24</u>.
2.1.5 Calculate Mr. Johnson's monthly taxes are <u>R9,915,69</u>.
<h3>Data and Calculations:</h3>
Gross Pay = R47,400,00
Pension fund contributions = 7.5% (R3,555,00)
WVF contribution = 1% (R177,12)
Medical aid contributions = R2,800
Annual medical credit = R33,600 (R2,800 x 12)
Total deductions = R6,532,12 (R3,555,00 + R177,12 + R2,800)
Taxable income = R40,867,88 (R47,400 - R6,532,12)
Annual taxable income = R490,414,56 (R40,867,88 x 12)
<h3>Johnson's Tax liability:</h3>
Annual tax liability = R110 739 + 36% of taxable income above R467 500
= R110,739 + 36% of R22,914,56 (R490,414,56 - R467,500)
= R110,739 + R8,249,24
= R118,988,24
Monthly Tax = R9,915,69 (R118,988,24/12)
Thus, the taxable income (gross pay minus deductions) forms the basis for determining the tax payable by Mr. Johnson during the tax year.
Learn more about taxable income at brainly.com/question/25307637
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<h3>Question Completion:</h3>
<u>Appendix A (Tax Rates)</u>
Taxable Income Rate of tax (R)
R1 – R216 200 18% of taxable income
R216 201 – R337 800 R38 916 + 26% of taxable income above R216 200
R337 801 – R467 500 R70 532 + 31% of taxable income above R337 800
R467 501 – R613 600 R110 739 + 36% of taxable income above R467 500
