QUESTION 1
a) Calculate the PAYE for
March 2024
Calculation Description Workings Amount (R)
Monthly Gross Salary Given 80,000
Bonus Received (25 March 2024) Given 160,000
Total Gross Remuneration for
80,000 + 160,000 240,000
March
Employee contribution (s
Less: Pension Fund Contribution -5,500
11(k))
Taxable Income for March 240,000 - 5,500 234,500
annual equivalent for PAYE purposes
Item Amount (R)
March taxable income × 12 234,500 × 12 = 2,814,000
Apply tax table (Natural persons)
Tax Bracket Calculation Tax (R)
R1 – R237,100 237,100 × 18% 42,678
R237,101 – R370,500 (370,500 - 237,100) × 26% 34,684
R370,501 – R512,800 (512,800 - 370,500) × 31% 44,113
R512,801 – R673,000 (673,000 - 512,800) × 36% 57,672
R673,001 – R857,900 (857,900 - 673,000) × 39% 72,111
R857,901 – R1,817,000 (1,817,000 - 857,900) × 41% 393,131
R1,817,001 – R2,814,000 (2,814,000 - 1,817,000) × 45% 448,650
Total annual tax 1,092,039
, Less: Primary rebate -17,235
Net annual tax 1,074,804
Step 4: Calculate monthly PAYE
Item Amount (R)
Annual tax ÷ 12 1,074,804 ÷ 12 = 89,567
PAYE for March 2024 89,567
b) Tax payable on the lump sum benefit
Debbie received two lump sums upon resignation: a departing gift and a pension fund
withdrawal.
1. Departing Gift (R70,000):
This is not a retirement funding lump sum benefit. It is a withdrawal benefit (gratuity) as
she resigned before normal retirement age. It is taxed according to the Withdrawal
Benefit Tax Table (Annexure 1(viii)).
a) Calculate the PAYE for
March 2024
Calculation Description Workings Amount (R)
Monthly Gross Salary Given 80,000
Bonus Received (25 March 2024) Given 160,000
Total Gross Remuneration for
80,000 + 160,000 240,000
March
Employee contribution (s
Less: Pension Fund Contribution -5,500
11(k))
Taxable Income for March 240,000 - 5,500 234,500
annual equivalent for PAYE purposes
Item Amount (R)
March taxable income × 12 234,500 × 12 = 2,814,000
Apply tax table (Natural persons)
Tax Bracket Calculation Tax (R)
R1 – R237,100 237,100 × 18% 42,678
R237,101 – R370,500 (370,500 - 237,100) × 26% 34,684
R370,501 – R512,800 (512,800 - 370,500) × 31% 44,113
R512,801 – R673,000 (673,000 - 512,800) × 36% 57,672
R673,001 – R857,900 (857,900 - 673,000) × 39% 72,111
R857,901 – R1,817,000 (1,817,000 - 857,900) × 41% 393,131
R1,817,001 – R2,814,000 (2,814,000 - 1,817,000) × 45% 448,650
Total annual tax 1,092,039
, Less: Primary rebate -17,235
Net annual tax 1,074,804
Step 4: Calculate monthly PAYE
Item Amount (R)
Annual tax ÷ 12 1,074,804 ÷ 12 = 89,567
PAYE for March 2024 89,567
b) Tax payable on the lump sum benefit
Debbie received two lump sums upon resignation: a departing gift and a pension fund
withdrawal.
1. Departing Gift (R70,000):
This is not a retirement funding lump sum benefit. It is a withdrawal benefit (gratuity) as
she resigned before normal retirement age. It is taxed according to the Withdrawal
Benefit Tax Table (Annexure 1(viii)).
