Leonie (65 years old) is a South African resident and was employed by Purple Plum. She retired at the end of December 2022 and had the following receipts for the 2023 year of assessment:

1. She received a monthly salary of R50 000, and her contract clearly states that an annual bonus (equal to one months salary) will be received in December of each year.
2. She received a rental income of R7 500 per month for the full year of assessment.
3. Total interest of R45 000 for the year was received on a fixed deposit with a South African bank (this is not from a tax-free investment).
4. She received a dividend of R4 500 from her investment in a local South African company.
5. She received a dividend of R6 300 from her investment in a company registered in Zambia. She holds 5% of the equity shares and voting rights of the company.
6. Purple Plum paid Leonie R125 000 in order for her not to continue to trade or use the knowledge she gained while working for Purple Plum for a period of 18 months.

Assume the following for Leonies 2023 year of assessment:

• Income R885 500
• Taxable income R725 550
• Tax payable R178 128

2.1 Calculate Leonies income for the 2023 year of assessment. Include the applicable section of the Income Tax Act as part of your answer and show all calculations.

2.2 Assume that Leonie had a taxable income of R725 550 for the 2023 year of assessment. Calculate Leonies total tax payable for the 2023 year of assessment. Round all answers to the nearest Rand.

2.3 Leonie is confused between the meaning of an average tax rate and the effective tax rate. Calculate Leonies average and effective tax rates and explain the difference between the two terms. Round all answers to the nearest Rand.