K9: Exercise 2 Tax
(a) Kirsty (48yrs) is a teacher that works for the GDE. She receives a gross salary of
R21 821,75 per month during 2015/2016 tax year. Each month PAYE (current tax
system), as well as contributions to the Pension Fund and Medical Fund are
subtracted from her salary. The undermentioned table shares her salary advice for
June 2015 for the 2015/16 tax year.
Kirsty’s salary advice for June 2015
Pay date: 20140630 Notch: B
Earnings Deductions
Item Description Amount Item Description Amount
0001 Basic salary 21 021,75 0001 PAYE 2 091,86
0554 Accomodation 900,00 0002 Pension (7,5%) F
0005 Medical fund 546,00
0006 UIF C
GROSS SALARY A Total deduction D
NETT SALARY E
(i) What is her GROSS salary per month?(A)
(ii) If your notch is your basic salary times 12, calculate Karen’s notch (B)
(iii) What percentage of your gross salary must you pay for UIF?
(iv) What must Karen pay per month for UIF? (C)
(v) What will her NETT salary per month be, after all deductions have been
made? (D&E)\
(vi) Determine the value of F
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(b) The tax laws for medical aid contributions changed. Medical aid contributions is no
longer deducted from gross salary to determine the taxable income, but it is deducted
from the tax itself.
People older than 65 can still deduct the medical contributions from the gross
salary before calculating the taxable income.
Medical Tax credits: 2015/2016 year of assessment is as follows:
R257 per month for the taxpayer who paid the medical scheme contributions.
R257 per month for the first dependant on his medical scheme.
R172 per month for each additional dependant(s) on his medical scheme.
Complete the medical aid tax credit table (change every year)
Taxpayer + dependant Medical Tax Credit
Per month Per year
Taxpayer (1)
Taxpayer+ 1 dependant
Taxpayer + 2 dependants
Taxpayer + 3 dependants
PERSONAL INCOME TAX TABLES: 2015/2016 TAX YEAR
TAXABLE INCOME TAX PAYABLE
0 – 174 550 18% of the taxable income
174 551 – 272 700 31 419 + 25% of taxable income above 174 550
272 701 – 377 450 55 957 + 30% of taxable income above 272 700
377 451 – 528 000 87 382 + 35% of taxable income above 377 450
528 001 – 673 100 140 074 + 38% of taxable income above 528 000
673 101 AND ABOVE 195 212 + 40% of taxable income above 673 100
Tax discounts
Primary discount R12 726
Additional discount (for persons 65 and older) R 7 110
Additional discount (for persons 75 and older) R 2 367
Tax treshhold
Persons under 65 R 70 700
Persons 65 years and older R 110 200
75 years and older R123 350
(c) What is the payable tax if the earnings per year is R523 000? (Accept that the person
is younger than 65 years of age and has 3 medical ais dependants.)
Annual income
Deductions Pension
Taxable income (subtract)
Tax Bracket
=
Discount _____________________
Total:
Medical Tax Credit
Total tax for the year
PAYE
(d) What is the payable tax for a 75-year-old for the 2015 tax year if his earnings is R45
250 per month? (Medical aid deductions is R2000 per month)
Annual income
Deductions Pension
Medical Tax Credit
Total:
Taxable income
Tax Bracket
=
Discount _____________________
_____________________
_____________________
Total
Total tax for the year
PAYE
(e) How much tax would a 80-year old person pay who earns R60 000 per month? He
has no medical aid dependants.
Annual income
Deductions Pension
Medical Tax Credit
Taxable income (subtract)
Tax Bracket
=
Discount
Total tax for the year
PAYE
(f) How much tax would a person younger than 65 pay, whose taxable income is
R70 700 per year. He has no medical aid fund. Show all your calculations.
Taxable income
Tax Bracket
=
Discount
Total tax for the year
