Question
In: Accounting
The following data relates to Sephakor Ltd for the month of April 2020. Names of Employees...
The following data relates to Sephakor Ltd for the month of April 2020.
Names of Employees Rates per hour (GHS) units of job Bonus (GHS)
Adusei Poku 30 30 760
Kwame Bekoe 25 40 430
Samuel Ato 40 45 440
Serwaa Akoto 45 35 550
James Obli 30 25 450
Additional information:
NB - It takes 4hours to complete a unit job
- Income tax is 10%
- Rent allowance is 15% of basic wages
- Risk allowance is at 5% of basic
- The SSF contribution is 15%.
(vi)Provident fund contribution is 13% of basic
- SSF & Provident fund are non-taxable deductions
You are required to prepare payroll for the month showing;
- Basic wages
- Gross wages
- Total deductions
- Net wages
- State the reasons why SSF & Provident Fund are non-taxable
Solutions
Expert Solution
Payroll for the month of April 2020
| S. No | Name of Employee | Adusei Poku | Kwame Bekoe | Samuel Ato | Serwaa Akoto | James Obli |
| A. | Rates per hour (GHS) | 30 | 25 | 40 | 45 | 30 |
| B. | units of job | 30 | 40 | 45 | 35 | 25 |
| C | Basic Wages | 900 | 1,000 | 1,800 | 1,575 | 750 |
| D | Add: Bonus | 760 | 430 | 440 | 550 | 450 |
| E | Gross Wages ( C + D) | 1660 | 1430 | 2240 | 2125 | 1200 |
| F | Less: Rent Allowance (15% of basic wage) | 135 | 150 | 270 | 236.25 | 112.5 |
| G | Less: Risk Allowance (5% of Basic Wages) | 45 | 50 | 90 | 78.75 | 37.5 |
| H. | Less: SSF Contribution (15 % of basic wage) | 135 | 150 | 270 | 236.25 | 112.5 |
| I | Less: PF Contribution (13% of basic wage) | 117 | 130 | 234 | 204.75 | 97.5 |
| J. | Total Deductions (F+ G + H + I) | 432 | 480 | 864 | 756 | 360 |
| K. | Wages before Tax (E -J) | 1228 | 950 | 1376 | 1369 | 840 |
| L. | Income Tax (10%) | 122.8 | 95 | 137.6 | 136.9 | 84 |
| M | Net Wages (K-L) | 1105.2 | 855 | 1238.4 | 1232.1 | 756 |
SSF and PF are non taxable upto certain limit. If that limit exceeds, then it would be taxable. As the PF and SSF do not exceed the limit, this is the reason that the both are non-taxable.
ekkarill92 answered 2 years agoRelated Solutions
The following data relates to Sephakor Ltd for the month of April 2020. Names of Employees...
The following data relates to Sephakor Ltd for the month of
April 2020.
Names of Employees Rates per hour (GHS) units of job Bonus
(GHS)
Adusei Poku 30 30 760
Kwame Bekoe 25 40 430
Samuel Ato 40 45 440
Serwaa Akoto 45 35 550
James Obli 30 25 450
Additional information:
NB - It takes 4hours to complete a unit job
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