Page 101 - Accountancy_F5

Exercise 3.3
Amani, Bajuta and Chikere are employed by Kahawa Supplies Enterprises. The
normal working hours are 8 per day, 22 days in a month. Time work in excess to this
is compensated at a rate of 1.5. The following data relate to the three workers during
the month of June 2024.
FOR ONLINE READING ONLY
Name of Employee Number of hours worked Normal Rate per hour
TZS
Amani 176 4,000

Bajuta 196 3,500
Chikere 190 5,000
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The following deductions are affected at the end of each month.
(a) PAYE tax:
(i) Salary up to TZS 450,000 is non-taxable.
(ii) Salary above TZS 450,000 but not exceed TZS 900,000 is 5% of the
amount in excess of TZS 450,000;
(iii) Salary above TZS 900,000 up to TZS 1,350,000 is TZS 22,500 plus 10%
of the amount in excess of TZS 900,000; and
(iv) Salary above TZS 1,350,000 is TZS 45,000 plus 20% of the amount in
excess of TZS 1,350,000.
(b) 5% is deducted on employees’ basic salary and 15% by the employer to
contribute for NSSF.
(c) 2% of the gross salary is deducted to contribute for workers association.
(d) A non-taxable housing allowance is given at 10% of basic salary. Only
Chikere has housing accommodation.
(e) Every employee is entitled to the following non-taxable allowances:
(i) Transport allowance TZS 10,000 per day;
(ii) Meal allowance TZS 15,000 per day; and
(iii) Chikere is to receive further TZS 150,000 for skill allowance at the end of
every month.
Required: Prepare a statement of net pay for each employee for the month of June 2024.

Student’s Book Form Five
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