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  • Session 5 - Exercise 1 (Solution)

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    marpeet taj
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    Richard Brooks works for a custom furniture company and is paid a salary of $24,000 per year plus 5% commission on his sales. For this pay period his sales were $30,000 so his commission is $1,500. His total earnings are $2,750. He claims the basic personal amount on his TD1 tax forms and has $25 in additional tax deducted. He receives a $500 per month vehicle allowance that is taxable, amounting to $250 per pay. After deductions for taxes, Canada Pension Plan, and Employment Insurance, his net pay is calculated to be $2,186.49.

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    Session 5 - Exercise 1 (solution)

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    Richard Brooks works for a custom furniture company and is paid a salary of $24,000 per year plus 5% commission on his sales. For this pay period his sales were $30,000 so his commission is $1,500. His total earnings are $2,750. He claims the basic personal amount on his TD1 tax forms and has $25 in additional tax deducted. He receives a $500 per month vehicle allowance that is taxable, amounting to $250 per pay. After deductions for taxes, Canada Pension Plan, and Employment Insurance, his net pay is calculated to be $2,186.49.

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    4 views8 pages

    Session 5 - Exercise 1 (Solution)

    Uploaded by

    marpeet taj
    Richard Brooks works for a custom furniture company and is paid a salary of $24,000 per year plus 5% commission on his sales. For this pay period his sales were $30,000 so his commission is $1,500. His total earnings are $2,750. He claims the basic personal amount on his TD1 tax forms and has $25 in additional tax deducted. He receives a $500 per month vehicle allowance that is taxable, amounting to $250 per pay. After deductions for taxes, Canada Pension Plan, and Employment Insurance, his net pay is calculated to be $2,186.49.

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    Download as PDF, TXT or read online from Scribd
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    of 8

    FMGT 4915 – Payroll Essentials

    FMGT 4915 – Payroll Essentials


    Session #5 - exercise 1

    Net pay - commission


    With benefits and allowance

    2021-01-30 BJessome FMGT 4915 PTS 1


    FMGT 4915 – Payroll Essentials cont’

    Calculation of Net Pay (salary and commission)


    • Richard Brooks works for a custom furniture manufacturing company in
    Alberta
    • He is paid a salary of $24,000 per year,
    • 30,000 / 24 pays = 1,250 per pay
    • plus 5% commission on his sales (paid each pay period)
    • For this pay period ending (Feb 12/21), he is to be paid commission on
    sales of $30,000
    30,000 * 5% = 1,500

    • Paid Semi-monthly (24 pays per year).

    2021-01-30 BJessome FMGT 4915 PTS 2


    FMGT 4915 – Payroll Essentials cont’

    Calculation of Net Pay (salary and commission)

    Salary = 1,250 per pay


    Commission = 1,500
    Total = 2,750 salary and commission without expenses so
    combined total included as salary in PDOC
     Richard will earn more than the minimum wage amount for Alberta.
    There is no need to validate if the amount paid to Richard is more than the
    minimum wage.

    2021-01-30 BJessome FMGT 4915 PTS 3


    FMGT 4915 – Payroll Essentials cont’

    Calc net pay cont’


    • He claims for the basic personal amount.
    TD1 13,808 (CC1) TD1AB 19,369 (CC1)

    • He has requested an additional $25 of income tax be deducted

    • His employer also pays him a vehicle allowance equivalent to $500 per
    month because he uses his own vehicle to see customers that want in-
    home consultations, (allowance is received on a per pay basis)
    Vehicle allowance not based on kilometres driven so is a
    cash taxable benefit 500 * 12 months / 24 pays = 250 per pay

    2021-01-30 BJessome FMGT 4915 PTS 4


    FMGT 4915 – Payroll Essentials cont’

    Calculation of Net Pay (salary and commission)

    2021-01-30 BJessome FMGT 4915 PTS 5


    FMGT 4915 – Payroll Essentials cont’

    Calc net pay cont’

    2021-01-30 BJessome FMGT 4915 PTS 6


    Calc net pay cont’
    FMGT 4915 – Payroll Essentials cont’

    2021-01-30 BJessome FMGT 4915 PTS 7


    Calc net pay cont’
    FMGT 4915 – Payroll Essentials cont’

    $2,186.49

    2021-01-30 BJessome FMGT 4915 PTS 8

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