Quiz 4

Scenario 1

Ms. Jane Dube, aged 50, is employed by Tradewinds (Pty) Ltd, a South African company that carries
on business in Johannesburg.

The following relates to Jane’s tax affairs for the 2021 year of assessment:

1. Employment
In terms of her employment contract, she receives the following remuneration:
- Monthly cash salary of R20 000

- Use of a company car which cost the company R180 000(excl VAT and a maintenance
plan). The car was purchased for Jane on 1 January 2020. Jane has unrestricted use of
the car. Tradewinds pays for all the fuel and maintenance of the car. Jane does not keep
any records of the kilometers travelled.

- Use of residential accommodation. Jane lives in a flat that Tradewinds owns. In 2009, the
company purchased a block of flats near its place of business with the idea of offering it
to employees as residential accommodation which forms part of their salary package.
The company bares the following costs in respect of Jane’s flat:
o Portion of bond interest R20 000
o Rates R1 000
o Insurance R500
o Electricity and water R12 000

The flat is a one bedroom flat and has been provided unfurnished. Jane’s remuneration
proxy is R216 000. Jane has no interest in Tradewinds.

2. Other income
Janes only other income for the 2021 year of assessment is interest income from a South
African bank of R90 820. Jane does not belong to a medical aid and does not incur any
medical expenses during the year of assessment

3. Provisional tax
In December 2019, Jane received her 2019 assessment which reflected a taxable income of
R350 000. Her 2020 assessment which is dated October 2020 reflects a taxable income of
R400 000.

Required:

1. Calculate the employees’ tax that must be withheld from Jane’s monthly remuneration that
she receives from Tradewinds (Pty) Ltd; and

2. If Jane used the basic amount in calculating her 2021 first provisional tax payment and the
estimated taxable income as R380 000 for her second provisional tax return, calculate 2021
third top up payment which she must make if she wishes to avoid interest and penalties.
 Scenario 2
Theresa Strydom, aged 40, received a salary of R9 500 per month for the period 1 March to
30 June 2020. On 30 June 2020 she received a bonus of R5 000. She contributes 7.5% of her
salary to the company pension fund and 10% to a retirement annuity fund. Her employer
does not contribute on her behalf to the pension fund.

On 1 July 2020 the business was sold to another company and Theresa was employed by the
new owners at a salary of R7 000 per month, plus an entertainment allowance of R1 000 per
month. She does not have to account for this allowance. The new company had no pension
fund, so she increased her retirement annuity fund contribution to 12.5% of her salary. Both
employers agreed to take the RAF contributions into account.0020

Required:
- Calculate the employees tax deductible from Theresa’s salary for the period ended 30 June
2020
- Calculate the employees tax deductible from Theresa’s salary for the period 1 July 2020 – 28
Feb 2021