Page 96 - Accountancy_F5

Solution 3.4
(i ) Computation of employee’s gross pay:
Gross pay = Basic pay + Allowances
Basic pay = Rate per hour x Normal working hours worked
= TZS 40,000 per hour # 40 hours
FOR ONLINE READING ONLY
= TZS 1,600,000
Overtime payment = Rate per hour x Overtime rate # Overtime hours worked

= TZS 40,000 # 1.5 # 7 hours
LANGUAGE EDITING
= TZS 420,000
LANGUAGE EDITING
Gross pay = TZS (1,600,000 + 420,000)
Gross pay = TZS 2,020,000
(ii ) Computation of employee’s PAYE:
Taxable income = 2,020,000 – 300,000 = 1,720,000

PAYE = (250,000 x 20%) + [(1,720,000-250,000) # 25%]
= 50,000 + 367,500
= 417,500

Tax payable for the week ended 9 May 2021 = TZS 417,500
th
Exercise: 3.2
1. Mloni is an employee of Kesha Company Ltd. On the week ended 7 January 2024
th
he worked a total of 52 hours. His hourly rate was TZS 35,000 per hour. Apart
from hours worked Mloni was paid a bonus of TZS 20,000.
Required: Calculate Mloni’s gross pay.
2. Mr. Palanjo is an accountant with a salary of TZS 2,200,000 per month plus a bonus,
which was TZS 400,000 for the month of May 2024. He pays health contributions
of 5 per cent of gross pay, and these are allowed as reliefs against income tax. In
addition to this, he has further reliefs (free pay) of TZS 430,000. The taxable pay
is taxed at the rate of 20 per cent on the first TZS 250,000 whilst the remainder
suffers the 25 per cent tax rate.
Required: Calculate the total deductions for May 2024.
3. Jamal has a job as a car salesman. He is paid a basic salary of TZS 800,000 per
month, with a commission extra of 0.5 per cent on the value of his car sales. During
the month of April 2024, he sold TZS 30,000,000 worth of cars. The first TZS
450,000 per month is free of income tax, on the next TZS 200,000 he paid at the
20 per cent rate and above that, he paid at the rate of 25 per cent.
Required: Calculate the tax payable for the month of April 2024.

Student’s Book Form Five
83

23/06/2024 17:35
ACCOUNTANCY_DUMMY_23 JUNE.indd 83
ACCOUNTANCY_DUMMY_23 JUNE.indd 83 23/06/2024 17:35