AGTiNix 10 Mpilenhle Ls 25 years old and his annual taxable income is \( \mathrm{R} 321367,20 \). He is the only merober of his medical aid. Use the 2018/2019 SARS tax table in the example above to answer the following questions. 1. Explain the difference between basic salary and gross income. 2. Define the term tax threshold. 3. What is the tux rebate for Mplenhle? 4. What is the tax bracket applicable to Mpilenhle's taxible Income?- 5. Identify the minimum tax payable for tax bracket 4. 6. Calculate Mpilenhle's annual income payable.

Sure, let's address each of your questions step by step using the 2018/2019 SARS tax tables. --- ### **1. Difference Between Basic Salary and Gross Income** - **Basic Salary:** This is the fixed amount of money an employee receives from their employer as compensation for their work. It does not include any additional earnings or benefits. Essentially, it's the base pay agreed upon in the employment contract. - **Gross Income:** Gross income encompasses the total earnings of an individual before any deductions are made. It includes the basic salary **plus** additional forms of compensation such as bonuses, overtime pay, commissions, allowances, and any other benefits. **_In summary:_** *Basic salary is the fixed remuneration for work performed, while gross income is the total earnings including all additional compensations before deductions.* --- ### **2. Definition of Tax Threshold** - **Tax Threshold:** The tax threshold is the minimum income level at which an individual becomes liable to pay income tax. If a person's **annual taxable income** is **below** this threshold, they are **not required** to pay any income tax. **_For the 2018/2019 tax year:_** - The **tax threshold** was **R16,425** for individuals under the age of 65. --- ### **3. Tax Rebate for Mpilenhle** - **Primary Personal Tax Rebate:** For the 2018/2019 tax year, the **primary rebate** was **R14,958**. This rebate is available to all individual taxpayers and directly reduces the amount of tax payable. - **Medical Tax Rebate:** Since Mpilenhle is a member of a medical aid, he is also eligible for the **medical rebate**. - **Amount:** **R319** per month - **Annual Medical Rebate:** R319 × 12 = **R3,828** **_Total Tax Rebate for Mpilenhle:_** **R14,958 (Primary Rebate) + R3,828 (Medical Rebate) = R18,786** --- ### **4. Applicable Tax Bracket for Mpilenhle's Taxable Income** - **Taxable Income:** R321,367.20 Using the 2018/2019 SARS tax tables: | **Tax Bracket** | **Income Range (R)** | **Tax Calculation** | |-----------------------|---------------------------|-----------------------------------------| | 1 | Up to 195,850 | 18% of taxable income | | 2 | 195,851 – 305,850 | R35,253 + 26% of taxable income above R195,850 | | 3 | 305,851 – 423,300 | R63,585 + 31% of taxable income above R305,850 | | 4 | 423,301 – 555,600 | R105,062 + 36% of taxable income above R423,300 | | ... | ... | ... | **_Mpilenhle's taxable income of R321,367.20 falls within Tax Bracket 3:_** - **Income Range:** R305,851 – R423,300 - **Tax Calculation Basis:** R63,585 + 31% of income above R305,850 --- ### **5. Minimum Tax Payable for Tax Bracket 4** - **Tax Bracket 4 Details (2018/2019):** - **Income Range:** R423,301 – R555,600 - **Minimum Tax Payable:** **R105,062** --- ### **6. Calculation of Mpilenhle's Annual Income Tax Payable** **Step 1: Determine Tax Before Rebates** Mpilenhle's taxable income = **R321,367.20** (falls in Tax Bracket 3) - **Tax Calculation:** - **Base Tax:** R63,585 - **Additional Tax:** 31% of (R321,367.20 - R305,850) = 0.31 × R15,517.20 = **R4,810.23** - **Total Tax Before Rebates:** R63,585 + R4,810.23 ≈ **R68,395.23** **Step 2: Subtract Applicable Rebates** - **Primary Rebate:** R14,958 - **Medical Rebate:** R3,828 - **Total Rebates:** R14,958 + R3,828 = **R18,786** **Step 3: Calculate Final Tax Payable** - **Tax Payable:** R68,395.23 - R18,786 ≈ **R49,609.23** **_Rounded Off:_** **Annual Income Tax Payable ≈ R49,609** --- **_Final Summary:_** Mpilenhle, with an annual taxable income of R321,367.20, falls under Tax Bracket 3 and is liable to pay approximately **R49,609** in income tax for the 2018/2019 tax year after accounting for applicable rebates.