1 Letoracy Grade 12 Investigation etermine the maximum income a person that is 65 yents old annust earm fore starting to pay tax. Is Sithole, a 65 -ycar-old saleswoman, eamed a gross monthy-salaty of 35455 during the \( 2020 / 2021 \) tax year. \( 7,5 \% \) of her gross sataryis ducted for contributions towards her pension fund. 1. Calculate her annual gross salary. 2. Calculate her tax rebate. 3. Calculate her annual taxable income. You may use the format: Annual taxable income \( =( \) annual gross salary - annual persion \( ) \) 4. Hence, use the tax table for 2020/2021 and the information above lo calculate Mrs Sithele's annual income tax. (6) (16) TOTAL MARKS: 50

Let's solve the problem step by step. ### Step 1: Calculate Annual Gross Salary Given that Sithole's gross monthly salary is \( 35455 \), we can calculate her annual gross salary by multiplying her monthly salary by 12 (the number of months in a year). \[ \text{Annual Gross Salary} = \text{Monthly Salary} \times 12 \] Substituting the known value: \[ \text{Annual Gross Salary} = 35455 \times 12 \] ### Step 2: Calculate Tax Rebate For the 2020/2021 tax year, individuals aged 65 and older receive a tax rebate. The tax rebate for individuals aged 65 and older is typically a fixed amount. For this calculation, we will assume a tax rebate of \( R 15,000 \) (this value may vary based on the specific tax regulations). ### Step 3: Calculate Annual Taxable Income To find the annual taxable income, we need to deduct the annual pension contributions from the annual gross salary. The pension contribution is \( 7.5\% \) of the gross salary. First, we calculate the annual pension contribution: \[ \text{Annual Pension Contribution} = \text{Annual Gross Salary} \times 0.075 \] Then, we can calculate the annual taxable income using the formula: \[ \text{Annual Taxable Income} = \text{Annual Gross Salary} - \text{Annual Pension Contribution} \] ### Step 4: Calculate Annual Income Tax To calculate the annual income tax, we will use the tax table for the 2020/2021 tax year. The tax brackets for that year are as follows (for example): - 0% on income up to \( R 205,900 \) - 18% on income from \( R 205,901 \) to \( R 321,600 \) - 26% on income from \( R 321,601 \) to \( R 445,100 \) - 31% on income from \( R 445,101 \) to \( R 584,200 \) - 36% on income from \( R 584,201 \) to \( R 744,800 \) - 39% on income from \( R 744,801 \) and above We will calculate the tax based on the annual taxable income. Now, let's perform the calculations. ### Performing Calculations 1. Calculate the annual gross salary. 2. Calculate the annual pension contribution. 3. Calculate the annual taxable income. 4. Calculate the annual income tax based on the taxable income. Let's proceed with these calculations. Calculate the value by following steps: - step0: Calculate: \(35455\times 12\) - step1: Multiply the numbers: \(425460\) Calculate or simplify the expression \( 35455 * 12 * 0.075 \). Calculate the value by following steps: - step0: Calculate: \(35455\times 12\times 0.075\) - step1: Multiply the terms: \(425460\times 0.075\) - step2: Multiply the numbers: \(31909.5\) ### Step 1: Calculate Annual Gross Salary The annual gross salary is calculated as follows: \[ \text{Annual Gross Salary} = 35455 \times 12 = 425460 \] ### Step 2: Calculate Annual Pension Contribution The annual pension contribution is: \[ \text{Annual Pension Contribution} = 425460 \times 0.075 = 31909.5 \] ### Step 3: Calculate Annual Taxable Income Now, we can calculate the annual taxable income: \[ \text{Annual Taxable Income} = \text{Annual Gross Salary} - \text{Annual Pension Contribution} \] Substituting the values we have: \[ \text{Annual Taxable Income} = 425460 - 31909.5 \] Let's calculate this value. Calculate the value by following steps: - step0: Calculate: \(425460-31909.5\) - step1: Subtract the numbers: \(393550.5\) ### Step 3: Calculate Annual Taxable Income The annual taxable income is calculated as follows: \[ \text{Annual Taxable Income} = 425460 - 31909.5 = 393550.5 \] ### Step 4: Calculate Annual Income Tax Now, we will calculate the annual income tax based on the taxable income of \( 393550.5 \). Using the tax brackets for the 2020/2021 tax year: 1. **0% on income up to \( R 205,900 \)**: - Tax: \( 0 \) 2. **18% on income from \( R 205,901 \) to \( R 321,600 \)**: - Taxable amount: \( 321600 - 205900 = 115700 \) - Tax: \( 115700 \times 0.18 \) 3. **26% on income from \( R 321,601 \) to \( R 445,100 \)**: - Taxable amount: \( 393550.5 - 321600 = 71950.5 \) - Tax: \( 71950.5 \times 0.26 \) Now, let's calculate the tax for each bracket and sum them up. Calculate the value by following steps: - step0: Calculate: \(71950.5\times 0.26\) - step1: Multiply the numbers: \(18707.13\) Calculate or simplify the expression \( 115700 * 0.18 \). Calculate the value by following steps: - step0: Calculate: \(115700\times 0.18\) - step1: Multiply the numbers: \(20826\) ### Step 4: Calculate Annual Income Tax Now, let's calculate the tax for each bracket: 1. **Tax from the second bracket (18%)**: \[ \text{Tax} = 115700 \times 0.18 = 20826 \] 2. **Tax from the third bracket (26%)**: \[ \text{Tax} = 71950.5 \times 0.26 \approx 18707.13 \] ### Total Annual Income Tax Now, we can sum the taxes from both brackets to find the total annual income tax: \[ \text{Total Annual Income Tax} = 20826 + 18707.13 \] Let's calculate this total. Calculate the value by following steps: - step0: Calculate: \(20826+18707.13\) - step1: Add the numbers: \(39533.13\) ### Total Annual Income Tax The total annual income tax is calculated as follows: \[ \text{Total Annual Income Tax} = 20826 + 18707.13 = 39533.13 \] ### Summary of Results 1. **Annual Gross Salary**: \( 425460 \) 2. **Annual Pension Contribution**: \( 31909.5 \) 3. **Annual Taxable Income**: \( 393550.5 \) 4. **Total Annual Income Tax**: \( 39533.13 \) Thus, Mrs. Sithole's total annual income tax for the 2020/2021 tax year is approximately \( 39533.13 \).