The basic salary of an employee is 20,000 find the following for this salary.

a) Calculate the allowances, if allowances are 50% of the basic salary. What is the taxable income of employee? Also find gross salary?

Answer:

1- Allowance:

50% of the basic salary

= Basic Salary x 50%

= 20,000 x 50 / 100

= 10, 00,000 /100

= 10,000

2- Taxable Income:

According to the taxation rules if allowances are 50% of basic salary, the amount is treated as tax free.

= 20,000

3- Gross Salary:

Basic Salary + Allowance

= Basic Salary + Allowance

= 20,000 + 10,000

= 30,000

b) What the cost of the business is on explanation of leaves (18.2%), group insurance/medical (5%) and additional social welfares (5.8%)?

Answer:

1- Cost of leaves:

18.2% of the gross salary

= Basic Salary x 18.2%

= 30,000 x 18.2 / 100

= 546,000 / 100

= 546,000 / 100

= 5,460

2- Group Insurance:

5% of the Gross Salary

= Basic Salary x 5%

= 30,000 x 5 / 100

= 150,000 / 100

= 1,500

Social Benefits:

5.8% of the Gross Salary

= Basic Salary x 5.8%

= 30,000 x 5.8 / 100

= 174,000 / 100

= 1,740

c) What is the total saving of the employees per month on account of provident trust fund

And gratuity?

Answer:

Provident Trust Fund

1/11 of the Basic Salary

= Basic Salary x 1/1

= 20,000 x 0.09

= 1,818

Gratuity

1/11 of the Basic Salary

= Basic Salary x 1/1

= 20,000 x 0.09

= 1,818

d) Define the gross remuneration and also find gross remuneration for the above salary package?

Answer:

Gross Salary = 20,000

Allowance = 10,000

Total Social Benefits = 725

Provident Trust Fund = 1818

Gratuity = 1818

Total = 34,361

Social Benefits

Cost of leaves + Group Insurance + Social Charges / 12

= 5,460 + 1,500 + 1,740 / 12

= 6,960 + 1,790 / 12

= 8.700 / 12

= 725