# Mr. Kimutai a teacher from Tuiyotich Secondary School earns K₤ 12000 per annum and lives in a house provided by the employer at a minimum rent of Ksh.2000 per month. He gets a family relief of K₤ 1320p.a. and is entitled to a relief of 10% of his insurance of K₤ 800p.a.

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Mr. Kimutai a teacher from Tuiyotich Secondary School earns K₤ 12000 per annum and lives in a house provided by the employer at a minimum rent of Ksh.2000 per month. He gets a family relief of K₤ 1320p.a. and is entitled to a relief of 10% of his insurance of K₤ 800p.a.

1. Calculate his annual tax bill based on the table below.
Income slab in K₤ p.a.              Rate
1 – 2100                               10%
2101 – 4200                            15%
4201 – 6300                            25%
6301 – 8400                            35%
Over 8400                              45%
2. Kimutai other deductions include.
• W.C.P.S = sh 600.00pm
• NHIF = sh 500.00pm
Calculate Kimutai’s net salary monthly.

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1.
 Income slab in K₤ p.a. Rate Tax in ₤ 1 – 2100 10% 210 2101 – 4200 15% 315 4201 – 6300 25% 523 6301 – 8400 35% 735 Over 8400(12600−8400−4200) Gross tax. 45% 1890 3675
Taxable Income = 12000 + 15% of 12000 − rent
115 × 2000 − 1200
100
=₤12,600 p.a
Net tax = 3675 − 1320 − 80
= ₤2275
2. Net salary p.a = 12600 − (₤2275 + 360 + 300)
=₤9665 p.a
9665 × 20
12
=Sh. 16,108