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Solution 3.5
A statement showing Mr. Jumanne’s net pay for March 2024
Details TZS TZS
Name of the employee: Jumanne Mpimbi
Month: March 2024
FOR ONLINE READING ONLY
Basic salary 780,000
Add: Taxable allowances:
- Meal allowance = (TZS 10,000 × 22 days) 220,000
LANGUAGE EDITING
- Transport allowance = (TZS 6,000 × 22 days) 132,000
- Rent allowance = (TZS780,000 ×10%) 78,000
LANGUAGE EDITING
430,000
Gross salary 1,210,000
Less: Deductions:
- PAYE tax* 78,790
- Development levy of gross Pay = 12,100
(1,210,000 ×1%)
- NSSF = (780,000 ×10%) 78,000
- Life insurance = (780,000 × 2%) 15,600
- Salary advance 150,000
-NHIF = (780,000 × 3%) 23400 357890
Net Pay 852,110
Workings:
*Computation of the PAYE amount
The taxable income = TZS 1210,000
Less: Allowable deduction – NSSF (10% of the Basic salary) = 78,000, NHIF (3% of
Basic salary) = 23,400
The Taxable income = TZS (1,210,000 – 78,000-23,400)
Taxable amount = TZS 1,108,600
Tax rate 15% on the amount in excess of TZS 850,000
= TZS 1,108,600– TZS 850,000 = TZS 258,600
PAYE = 15% × 258,600 = TZS 38,790+40,000
TZS78,790
Student’s Book Form Five
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