Question 3 Short Case (12 marks)

You are employed as a sales representative throughout 2020, with a salary of $175,000 plus a commission on all your sales. Your commissions income in 2020 is $85,000. The employer reimburses you for your hotel, meals, and airline costs. Advertising and promotion expenses are your expense as the employer will not provide an allowance or reimbursement for these expenses.

You use your own car for work. You receive an allowance for using your own car of $1,500 each month. You estimate that for 2020 the total costs associated with driving your car will be:

Operating Costs $10,600

Capital Cost Allowance 4,500

Financing Costs 1,800

Total $16,900

Other Information

1. Your employment related expenses are:

Travel Costs (Hotel And Airline Costs) $18,000

Travel Costs (Meals) 8,500

Advertising And Promotion 23,000

2. You drive the car a total of 53,000 kilometers during 2020, with 37,000 kilometers of these related to work.

3. You have a group disability insurance plan and the company pays all of the premiums. The plan provides periodic benefits that compensate for lost employment income. This costs the employer $4,500 per year.

4. The employer provides a $1,000,000 life insurance policy for you. The premiums paid by the employer cost $3,800 each year.

Required:

Calculate your 2020 net employment income.