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About this video
A 30-mark Grade 12 Maths Literacy test on taxation worked through: reading a salary advice, gross, basic and net salary, pension as a percentage, annual taxable income, tax rebates and the tax threshold, income tax from the tax table with medical tax credits, and a progressive tax formula.
What it covers
- Gross, basic and net salary on a salary advice
- Annual taxable income: only UIF, pension and donations are deducted
- Tax rebates by age; checking a tax threshold
- Tax from the table, minus the rebate and the medical tax credits
- Monthly versus annual amounts
- A progressive tax formula
Extra worked examples
✍️ Extra example: a teacher earns a gross salary of R32 000 a month and pays R2 400 a month into a pension fund. Find her annual taxable income.
- 132 000 − 2 400 = R29 600 a monthOnly UIF, pension and donations are tax-deductible.
- 2R29 600 × 12 = R355 200 a yearThe tax table works with ANNUAL income.
✍️ Extra example: find her monthly income tax. Use the bracket R237 101 – R370 500: R42 678 + 26% of the amount above R237 100. She is under 65 (primary rebate R17 235) and has medical aid for herself only (R364 credit a month).
- 1355 200 − 237 100 = R118 100The amount above the start of her bracket.
- 226% × 118 100 + 42 678 = 30 706 + 42 678 = R73 384The tax before any rebate.
- 373 384 − 17 235 = R56 149Under 65: the primary rebate only.
- 4364 × 12 = R4 368, so 56 149 − 4 368 = R51 781 a yearThe medical credits are monthly — make them annual before subtracting.
- 551 781 ÷ 12 = R4 315,08 a monthBack to a monthly amount.
Exercises to try
Work each one out, then click to reveal the answer.
- 1Explain the difference between gross salary and net salary.
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Gross is the total earned before deductions; net is what is paid out after all the deductions. - 2A basic salary is R28 000 and the pension fund takes 7,5% of it. Find the monthly pension contribution.
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28 000 × 7,5 ÷ 100 = R2 100 - 3How many tax rebates does a 68-year-old qualify for?
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Two: the primary and the secondary rebate (65 to under 75) - 4Check the threshold: R95 750 taxed at 18%, with a primary rebate of R17 235. Is any tax payable?
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95 750 × 18% = R17 235; R17 235 − R17 235 = R0, so no tax — the threshold is correct - 5A country taxes 10% on the first $10 000 and 20% on the rest. Find the tax on $16 500.
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10 000 × 10% + 6 500 × 20% = $1 000 + $1 300 = $2 300 — only the part ABOVE $10 000 is taxed at 20%
Practise this topic
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