selva earns \$43000 per annum. she has personal allowances of \$4400 she also pays pension contributions through her employer at a rate of 5% of her basic salary. calculate

i) gross pay

ii) total allowances

iii) taxable income

iii) tax liability

iv) net annual pay

v) monthly pay and monthly tax

NB: USE THE TAX TABLE BELOW

 taxable income tax rate 0-\$36000 20% \$36000 and above 40%

(i) Basic salary = \$43000 (gross pay).

5% of salary = \$2150 (pension contribution).

(ii) Allowance = \$4400 assuming pension contribution is not a tax allowance.

(iii) Personal Allowance deducted from salary leaves \$38600 (taxable income).

20% tax on \$36000=\$7200.

40% tax on 38600-36000=\$2600: \$1040

(iv) Total tax due=7200+1040=\$8240. (Wrongly numbered (iii))

Total deductions from pay=\$2150 (pension) + \$8240 (tax) = \$10390.

(v) Net salary = 43000-10390=\$32610. (Wrongly numbered (iv))

(vi) Monthly salary = \$2717.50; monthly tax = \$686.67. (Wrongly numbered (v))
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