Question

Okahandja Constructions CC is registered company that provides N$2 500 housing benefits to each of its three employees in terms of an approved housing scheme. The employees remuneration for the year ended 28/02/2020 is as follows: John (Builder) N$14 500 Michelle (Builder) N$29 000 Beukes (Office Administrator) N$175 000 In addition, the employees are provided with a yearly uniform based on their job description. Builders are provided with overalls and safety boots (valued at N$700) to wear as part of their employment condition and administrators are given an allowance of N$500 to buy suitable office wear.

Required: Calculate the Taxable Income for the following employees: a) Michelle (10) b) Beukes (7)

Individual tax rate table

Income Bracket Tax Calculation

0- 50 000 No Tax

50 000 - 100 000 18% of amount above 50 000

100 001 - 300 000 9 000 + 25% of amount above 100 000

300 001-500 000 59 000 + 28% of amount above 300 000

500 001 - 800 000 115 000 +30% of amount above 500 000

800 001 - 1.5 mil 205 000 + 32% of amount above 800 000

Above 1.5 mil 429 000 + 37% of amount above 1.5 mil

Answer 1

taxable income

michele = 29000 (remuneration)+2500(note 1)+700(safety boots)=32200

beukes=175000(remuneration)+2500 (note 1)+500(office wear allowance)=178000

tax

michele = nil

beukes =upto 50000 nil

50000-100000 ie 50000 @18% = 9000

100000-300000 25% ie for 78000 =78000*25%=19500

total= 28500

notes:

1. Employee housing benefits can be non-taxable to employees if all three of these conditions are met:

• The housing is provided on the property owned by the business or employer
• The housing is provided for the convenience of the employer. The employer must have a "substantial business reason" for this, such as a remote work location.
• The employee must accept housing as a condition of employment. A condition of employment is an agreement at the beginning of employment by both employer and employee.

nothing mentioned thus taxable