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 )

Question

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 )

Answer 1

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.

Answer 2

To determine the taxable employment income (TEI) for Ato Hizkiyas, follow these steps:

Step 1: Calculate regular salary:
Br 6,200 / 160 hours = Br 38.75 per hour
Regular salary = Br 38.75 x 170 hours

Step 2: Calculate overtime pay:
Overtime hours = 170 - 160 = 10 hours
Overtime pay = (Br 38.75 x 1.5) x 10 hours

Step 3: Calculate total salary before deductions:
Total salary before deductions = Regular salary + Overtime pay

Step 4: Add transportation allowance:
Total salary before deductions += Br 500 transportation allowance

Step 5: Calculate taxable employment income (TEI):
TEI = Total salary before deductions - any allowable deductions (e.g., tax exemptions, social security contributions)

Note: The specific taxable income deductions may vary based on local tax laws and regulations. Please consult the relevant tax authorities or a tax professional for accurate and up-to-date information.