Questions One

QUESTION 1 TAXATION OF EMPLOYMENT INCOME 10 Marks Aki with three dependents works for the private sector in Mount Hagen. He earns K120000 in salary per year and is also provided the following employment benefits in 2020; - House rented by the employer at K3500 per week, - Motor vehicle with fuel for unrestricted use, (Driver is provided during the business hours, Driver is paid K 350 per fortnight) - Cash entertainment allowance of K300 per fortnight, - Education expenses for 2 children paid direct to the school by the employee total K 15,000 per annum - Superannuation contribution to NASFUND of K 500 per fortnight by the employer. - Electricity and Gas Expenses paid by employer K 7500 per annum - Telephone allowance K 150 per fortnight (actual telephone expenses K 100 per fortnight) - Aki has given K 15000 donation to approved charitable institution. (a) Calculate taxpayer's taxable salary or wages per fortnight and per year. ( 8 Marks) (b) Calculate taxpayer's salary or wages net tax liability per fortnight. (2 Marks) QUESTION 1 TAXATION OF EMPLOYMENT INCOME 10 Marks Aki with three dependents works for the private sector in Mount Hagen. He earns K120000 in salary per year and is also provided the following employment benefits in 2020; - House rented by the employer at K3500 per week, - Motor vehicle with fuel for unrestricted use, (Driver is provided during the business hours, Driver is paid K 350 per fortnight) - Cash entertainment allowance of K300 per fortnight, - Education expenses for 2 children paid direct to the school by the employee total K 15,000 per annum - Superannuation contribution to NASFUND of K 500 per fortnight by the employer. - Electricity and Gas Expenses paid by employer K 7500 per annum - Telephone allowance K 150 per fortnight (actual telephone expenses K 100 per fortnight) - Aki has given K 15000 donation to approved charitable institution. (a) Calculate taxpayer's taxable salary or wages per fortnight and per year. ( 8 Marks) (b) Calculate taxpayer's salary or wages net tax liability per fortnight. (2 Marks)