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Assignment Chizman

The document outlines definitions of employee, independent contractor, and employer according to the Income Tax Act, emphasizing their roles and tax responsibilities. It details Miss Enita Franklin's tax calculations for her business and employment, showing her total tax payable amounts. Additionally, it mentions two documents she signed related to her employment and tax withholding.

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8 views3 pages

Assignment Chizman

The document outlines definitions of employee, independent contractor, and employer according to the Income Tax Act, emphasizing their roles and tax responsibilities. It details Miss Enita Franklin's tax calculations for her business and employment, showing her total tax payable amounts. Additionally, it mentions two documents she signed related to her employment and tax withholding.

Uploaded by

Kenny
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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a) i) Employee:

The Income Tax Act states that an employee is any person who works for any other person,
whether as a servant or apprentice, and whether remunerated by wages, salary, commission, fees
or otherwise. This means an employee is someone who is employed by another person and
receives compensation for their work, whether it be in the form of wages, salary, commission, or
any other form of payment.

ii) Independent Contractor:


The Income Tax Act defines an independent contractor as any person who provides services to
another person, but who is not under the control or direction of that other person, and who is
responsible for his or her own income tax affairs. This mean an independent contractor is
someone who provides services to another person on a contract basis, but who is not considered
an employee of that person. This means that the independent contractor is responsible for paying
their own income tax, rather than having it deducted from their wages or salary by their
employer.

iii) Employer:
According to the Income Tax Act, an employer is any person who has the management or
control of the payment of remuneration to any person for services rendered. In other words, an
employer is someone who has the responsibility for paying the wages or salaries of their
employees. This definition covers both individuals and organizations that employ others.

b) Miss Enita Franklin’s tax payable for her business

$
Income 120,000.00
Less Administration Expenses (48,600.00)
Taxable Income 71,400.00

Tax payable (71400×24.72%) 17,650.08


Aids Levy 2,142.00
Tax Payable 19,792.08
c) Two documents that she signed are:
Employee's Withholding Allowance Certificate: This lets her new employer know the tax
filing status, how many allowances she is claiming, and how much to withhold from each
paycheck.

Employment Contract: This document outlines the terms and conditions of her employment. It
includes details such as her job title, salary, benefits, work hours, and other relevant information.

d) Miss Enita Franklin’s tax payable from employment

$ $
Salary 578,400.00
Bonus for the year 36,600.00
Entertainment allowance 8,400.00
Funeral benefit from employer ---
Annuity for past services rendered 16,000.00
Dividends received from pelhams 9,600.00
Loan from Mushroom (62000 at 3%) 63,860.00
Annuity from insurance company 2,000.00
House benefit 17,650.00
Car received from employer 3000cc (108000×80%) 86,400.00
An award from the employer 24,000.00
Teas provided by the employer 12,000.00
854,910.00
Less: Pension fund contribution 38,200.00
Medical aid subscriptions 8,600.00
PAYE deduction for the year 239,400.00
NSSA contribution 3,800.00 (290,000.00)
Taxable Income 564,910.00
Tax on (564910-36300) × 35% 154,908.50
Less: tax credit -
Add: AIDS Levy 3% 16,947.30
Tax payable 171,855.80

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