Mary Jones works as a technical assistant at Communications Jamaica Ltd. She earns annual basic salary of
Question:
Mary Jones works as a technical assistant at Communications Jamaica Ltd. She earns annual basic salary of $2,470,000. In addition she is paid a weekly taxable meal allowance of
$10,000; and non-taxable uniform and laundry allowance of $10,500 weekly. The following information was also made available.
Notes:
i. Statutory Rates
Deductions | Employee’s Rate | Employer’s Rate |
Income tax | 25% of taxable income | |
NIS | 3% of gross income | 2.5% of gross income |
Education Tax | 2.25% of statutory income | 3.5% of statutory income |
NHT | 2% of gross income | 3% of gross income |
ii. NIS is paid at 3% of gross income up to $5,000,000 p.a. after that the “flat rate” applies.
iii. The Income tax threshold is $1,500,096 per annum.
iv. The following personal deductions are made from salary: Credit union $416,000 annually; insurance $78,000 annually; and car loan of $7,500 weekly.
v. The company operates a pension scheme to which a contribution of 6% of basic income is made.
vi. For the fortnight January 10, 2016-January 23, 2016, overtime amounting to $12,000 was earned.
Assist Mary Jones by calculating the following for the fortnight January 10-23, 2016:
a. Gross Pay
b. Statutory Income
c. Taxable Income
d. Net Pay
South Western Federal Taxation 2015
ISBN: 9781305310810
38th Edition
Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young