Tutorial question unit 2

1. State the difference between ordinary wages and additional wages

Ordinary wages Additional wages

Wages for the month Wages paid not wholly or

exclusively exclusively
Include allowance (food, travel Examples : annual bonus, leave
and overtime etc) pay and incentives.
Total wages is the sum of ordinary wages and additional wages

2. Assuming you are the employer, which method of salary payment is preferred? State your
reason.

 Payment by cash
o It is common practice for a small and medium sized company to pay workers,
especially those on the lower scale of wages.
o It is a convenient mode of payment for the workers to save considerable time from
going to bank for cash withdrawal.
 Payment by cheque
o Employees need not carry large sum of cash and risk getting robbed.
o Cheques involve paper trail which allow employees to document details of who
received the payment, what day the payment was made.
 Payment by bank transfer
o Salary can credit to employee’s preferred bank account.
o Direct deposits cost less than cheques
o It is safe as financial institutions(banks) have all the security resources in

3. State and explain the type of reports for statutory(law) compliance.

Foreign worker levy
Employers who employ any Every employer will have to tax
foreign worker under a
work permit (wp) are
required to pay the
monthly foreign levy and
declare the same to MOM
periodically
CPF-form 91
submit the CPF contribution Under the income tax act
details and if done by
manual mode i.e by
payment advice, form
91has to be submitted to
the CPF Board periodically
Statement of income for
an employer is required to
provide his employee with
a statement of his salaries
for the past year (IR8A
Form – the returns of
employee’s Remuneration)
so that his employee can
file his tax return by April
each year.

4. Daremi is a Sales Executive at Healthy Food Trading, where he earns a basic wage of $1,000
and enjoys a commission of 5% and for every $5,000 of health products sold. What is his
total wage if his customers bought $10,000 of health products?
o 5% of $5000 = $250
10% of 10000 = $500
$500 + $1000 = $1500

5. Carolyn is entitled to the following allowances: $30 for travelling, reimbursement for
entertainment claims are allowed subject to a maximum of $100 per month. For the month
of March, Carolyn’s travelling bill was $80, entertainment expenses was $200. Her monthly
wage is $2,500. How much is Carolyn’s total wage for the month?

o $30 + $2500 + $100(because she can only claim $100 per month) = $2630
6. Calculate the monthly contribution for employee, employer and total contribution for the
following salary amount:
a. Monthly salary of $2,300 (employee $460) (employer $391) (total contribution =
employee + employer = $851)

b. Monthly salary of $4,650 (employee $930) (employer $790 or $791) (total contribution =
employee + employer = $1721)

7. Jason is 30 years old, he earned $4,000 a month as an engineer. His company gave him a
bonus of 3 months for the year.
a. How much is the total contribution to his CPF account?
b. How much did Jason contribute to his CPF account?
c. How much did Jason’s employer contribute to his CPF account?

A. $4000 x 12( yearly) + $4000 x 3 bonus) = $60000

$60000 x 0.37 = $22000

B. $60000 x 20%= 12000

C. $60000 x 17% = $10200