70.2K

Verified Solution

Link Copied!

Stephen is employed as an accountant by ABC Manufacturers Limited. His emoluments for year $2023$ comprised of:

i$)$ Basi salary Kshs $14,200,0000$

ii$)$ A company's house leased at Kshs $300,000$ per month at arm's length was provided. He contributed $1\%$ of his basic salary towards rent.

iii$)$ Medical insurance cover, Inpatient, Kshs $10$ million, outpatient Kshs $500,000.$ This is available for all staff in the company.

Other details:

i$)$ The company paid school fees for his children, Kshs $604,369$ in the year

ii$)$ He was issue with $10,000$ shares of Kshs $20$ par as a bonus in the year. The market value was estimated at Kshs $500$ per share.

iii$)$ He paid to a mortgage plan, the total related interest for the year was Kshs $412,370.$

iv$)$ He has a life insurance cover for which he paid premiums Kshs $405,377$ in the year.

v$)$ He contributed Kshs $480,000$ to a register pension fund

vi$)$ The following statutory deductions were effected by the employer:

NSSF $-$ Kshs $200,$ for January, and Kshs $1,080$ per month in the remaining months

NHIF $-$ Kshs $1,700$ per month.

Pay As You Earn $[$PAYE$].$

Required:

a$)$ The tax payable by Stephen in the year

b$)$ The net salary, if only statutory deductions were effected by the employer

c$)$ State nay assumptions you have made.

Answer & Explanation Solved by verified expert

See Answer