To determine the taxable employment income (TEI) of Ato Hizkiyas, we need to calculate his total earnings including the basic salary, overtime pay, and transportation allowance.
1. Basic Salary: Br 6,200 (for 160 normal working hours)
Since Ato Hizkiyas worked 170 hours, we need to calculate his hourly rate using the formula: Basic Salary / Normal Working Hours
Hourly rate = 6,200 / 160 = Br 38.75
Total basic salary earned for 170 hours = Hourly rate * Worked Hours
Total basic salary earned = 38.75 * 170 = Br 6,587.50
2. Overtime Pay: Ato Hizkiyas worked an extra 10 hours (170 - 160)
Overtime rate = Hourly rate * 1.5 (since overtime work is done on employee rest day)
Overtime pay = Overtime rate * Overtime hours
Overtime pay = 38.75 * 1.5 * 10 = Br 581.25
3. Transportation Allowance: Br 500 (according to the employment contract)
Now, let's calculate the TEI:
TEI = Total Earnings - Non-Taxable Allowances
Total Earnings = Total basic salary earned + Overtime pay
Total Earnings = 6,587.50 + 581.25 = Br 7,168.75
TEI = 7,168.75 - 500 = Br 6,668.75
Therefore, the Taxable Employment Income (TEI) of Ato Hizkiyas is Br 6,668.75.
Ato Hizkiyas is an employee of XYZ PLC , The basic salary of Br 6,200 is ment for 160 normal working hours He worked 170 hours during the month of Hamle 2013. Assuming that all overtime work is done on employee rest day and the employe received Br 500 transportation allowance according the employment contract. Required: Determine Taxable Employment income ( TEI )
1 answer
1 answer