Nielson is a contract-based employee working in one of the government departments. The contract period started from June 1st, 2018 to May 31st, 2020. During the year ended March 31st, 2020, he received the following from his employer (the government): 1. Annual Salary (from June 1st, 2018 to May 31st, 2020): $480,000 m. Contract gratuity: 15% of his total contract salary upon completion of the 2-year employment contract n. The employer deducted 5% of Nielson's monthly salary as his contribution to the MPF retirement scheme Other information: 1. Nielson's income from the part-time job, from April 1st, 2018 to May 31st, 2018, was $32,000 in total. m. Nielson paid the following i. Cash donations to approved charitable organizations $5,000 ii. Self-education expenses $2,000 n. Nielson and his wife have a 2-year old son.2 o. Nielson's wife is a full-time housewife. p. Nielson's mother-in-law aged 57 is living with him. 4. Nielson bought an apartment under a mortgage loan from bank. The annual interest payment for the mortgage is $45,000. r. Nielson purchased a health insurance package which is a certified plan of Voluntary Health Insurance Scheme at a premium of $4,000 per year which covers the period from April 1st 2019 to March 31st, 2020. $. Nielson select to have the contract gratuity related back Question a. Compute the amount of contract gratuity to be assessed in each of the years of assessment concerned. (10 marks) b. Compute Nielson's net assessable income and the salaries tax payable for the year of assessment 2019/20. Which tax rate, standard or progressive, will he choose to pay the tax? (25 marks) Nielson is a contract-based employee working in one of the government departments. The contract period started from June 1st, 2018 to May 31st, 2020. During the year ended March 31st, 2020, he received the following from his employer (the government): 1. Annual Salary (from June 1st, 2018 to May 31st, 2020): $480,000 m. Contract gratuity: 15% of his total contract salary upon completion of the 2-year employment contract n. The employer deducted 5% of Nielson's monthly salary as his contribution to the MPF retirement scheme Other information: 1. Nielson's income from the part-time job, from April 1st, 2018 to May 31st, 2018, was $32,000 in total. m. Nielson paid the following i. Cash donations to approved charitable organizations $5,000 ii. Self-education expenses $2,000 n. Nielson and his wife have a 2-year old son.2 o. Nielson's wife is a full-time housewife. p. Nielson's mother-in-law aged 57 is living with him. 4. Nielson bought an apartment under a mortgage loan from bank. The annual interest payment for the mortgage is $45,000. r. Nielson purchased a health insurance package which is a certified plan of Voluntary Health Insurance Scheme at a premium of $4,000 per year which covers the period from April 1st 2019 to March 31st, 2020. $. Nielson select to have the contract gratuity related back Question a. Compute the amount of contract gratuity to be assessed in each of the years of assessment concerned. (10 marks) b. Compute Nielson's net assessable income and the salaries tax payable for the year of assessment 2019/20. Which tax rate, standard or progressive, will he choose to pay the tax? (25 marks)
