QUESTION $1$

Gavin Henckert, aged $40,$ is about to sign to revised employment agreement and has approached you to clarify some of the tax aspects of the various options he is considering.

He has been offered a package equivalent to a cost to his employer of R$400000$ per annum. The following options are available.

Option A

A cash salary of R$400000$ per annum.

Membership to a pension fund. Employer and employee contributes equally, total contribution of R$50000$ per annum. His salary will be reduced by the employers' contribution.

Option B

Membership to a non$-$contributory provident fund. The employer will contribute R$40000$ per annum and reduce his salary accordingly.

The use of a company car. The car will have a cost of R$160000.$ His salary will be reduced by R$5500$ per month, being the interest payments carried by the employer and running expenses which is Estimated at R$1500$ per month.

Option C

Free meals in a staff canteen. His salary will be reduced by R$200$ per month.

Free accommodation in an unfurnished house owned by the employer. His remuneration proxy is R$350000.$ His salary will be reduced by R$4000$ per month.

$(8)$

REQUIRED:

Calculate the after tax earnings for all of the above options. Structure your answer as a normal tax calculation and discuss the tax consequences with each entry. All workings should be part of the calculation. For purposes of your answer, the tax rates of $2024$ should be used.

Example:

Annual bonus

$300000$

Include as gross income