Page 90 - Accountancy_F5

Required: Calculate Mr. Rizwan semi-annually salary for the year ending 30 June
th
2023.
2. On 1 January 2024. Juma enters into two (2) years’ contracts of employment with
st
PQR Ltd. He agreed basic pay amounted to TZS 1,600,000 per month. On the first
month Juma was granted a loan amounted to TZS 500,000 from his employer with
agreement to repay TZS100, 000 per month. During the year 2024, Juma worked
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for three (3) months only, before terminating his contract.
Required: Calculate Juma’s basic pay for the quarter ending 31 March 2024.
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LANGUAGE EDITING
3. JM Enterprise pays a monthly basic salary of TZS 2,500,000 for operational
managers. Mr. Michael is one of the operational managers in JM Enterprise since
LANGUAGE EDITING
1 January 2023.
st
Required: Calculate Michael’s annual basic salary for the year ended 31 December
st
2023

Employee’s gross pay
An employee is entitled to the amount of wages or salaries and other allowances. This
amount is known as gross pay. Gross pay is the sum or total of basic pay, monetary
benefits, entitlements and overtime payments. In some cases, bonuses may be paid on
top of these ‘normal’ earnings. Bonus schemes vary widely and may depend on amount
of net profit made by the entity or amount of work performed, quality of performance by
the employee, production levels achieved either by the whole entity or by the department
in which the employee works. At times, these bonuses can result to a higher amount
than an employee’s basic salary.

Allowances
On top of the basic pay, an employee might be entitled to additional payments or benefits
as per employment agreement. These payments are known as allowances. Allowances
given to employees vary from one entity to another and from one employee to another.
These allowances include: transport allowance, meals allowance, medical allowance,
house allowance, hardship allowance and any other additional payment as per employment
agreement. Some of the allowances are exempted from tax and some are not.
Important aspects of overtime pay: calculations and implications
The concept of overtime payment is indeed a crucial aspect of employee compensation.
The arrangements for compensating individuals for overtime, which refers to time
worked beyond the standard working hours, can vary significantly. Standard working
hours are generally considered to be 8 hours per day, 40 hours per week, or 176 hours
per month. The figure of 176 hours is derived from the average number of workdays in
a month (22), multiplied by the standard 8-hour workday.

Student’s Book Form Five
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