Gr 12 Math Lit: Ch 1.2 Taxation
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Questions and Answers

What is the total amount earned in a month, including salary, overtime, bonuses, etc. called?

  • Taxable Income
  • Net Salary
  • Deductions
  • Gross Salary (correct)

    • What is the purpose of UIF (Unemployment Insurance Fund) deductions?

  • To pay trade union fees
  • To fund medical expenses
  • To contribute to pension funds
  • To provide insurance against unemployment (correct)

    • What is the formula to calculate Net Salary?

  • Net Salary = Gross Salary - Deductions (correct)
  • Net Salary = Gross Salary + Deductions
  • Net Salary = Taxable Income + Deductions
  • Net Salary = Gross Income - Tax-Deductible Deductions

    • What is the correct order to calculate income tax?

    <p>Determine taxable income, then calculate income tax</p> Signup and view all the answers

    What type of expenses do not reduce taxable income?

    <p>Non-Tax Deductible Expenses</p> Signup and view all the answers

    What is the purpose of deduction tables?

    <p>To provide a quick reference for determining tax owed</p> Signup and view all the answers

    What is Taxable Income?

    <p>Gross Income - Tax-Deductible Deductions</p> Signup and view all the answers

    What is the difference between Tax-Deductible Deductions and Non-Tax Deductible Expenses?

    <p>Tax-Deductible Deductions reduce taxable income, while Non-Tax Deductible Expenses do not</p> Signup and view all the answers

    What is the purpose of a tax bracket?

    <p>To charge a specific tax rate for a range of taxable incomes</p> Signup and view all the answers

    What is the primary purpose of an IRP5 form?

    <p>To summarize total earnings and deductions</p> Signup and view all the answers

    What is the result of calculating the taxable income?

    <p>The gross income minus tax-deductible deductions</p> Signup and view all the answers

    What is the purpose of PAYE?

    <p>To ensure taxes are collected regularly throughout the year</p> Signup and view all the answers

    What is the total UIF contribution?

    <p>2% of the gross salary</p> Signup and view all the answers

    What is the tax threshold for individuals younger than 65?

    <p>R67,111</p> Signup and view all the answers

    What is the purpose of a tax rebate?

    <p>To decrease the tax payable</p> Signup and view all the answers

    What is the primary rebate amount for individuals?

    <p>R12,080</p> Signup and view all the answers

    What is the purpose of calculating the net salary?

    <p>To determine the take-home pay after all deductions</p> Signup and view all the answers

    What is the next step after calculating the taxable income?

    <p>Determine the tax bracket</p> Signup and view all the answers

    What is the purpose of subtracting deductions from gross salary?

    <p>To determine net salary</p> Signup and view all the answers

    What is the main difference between tax-deductible deductions and non-tax deductible expenses?

    <p>One reduces taxable income, and the other does not</p> Signup and view all the answers

    What is the purpose of income tax formulas?

    <p>To calculate income tax in tax brackets</p> Signup and view all the answers

    What type of income is subject to income tax?

    <p>All sources of income</p> Signup and view all the answers

    What is the relationship between gross income and taxable income?

    <p>Taxable income is gross income minus tax-deductible deductions</p> Signup and view all the answers

    What is the purpose of medical aid deductions?

    <p>To reduce taxable income</p> Signup and view all the answers

    What type of deductions are loan repayments?

    <p>Taxable deductions</p> Signup and view all the answers

    What is the result of calculating net salary?

    <p>Take-home pay</p> Signup and view all the answers

    What is the purpose of using tax tables?

    <p>To identify the correct tax bracket for the taxable income</p> Signup and view all the answers

    Which of the following is NOT a type of tax rebate?

    <p>Quaternary rebate</p> Signup and view all the answers

    What is the tax threshold for individuals aged 65-75?

    <p>R104,611</p> Signup and view all the answers

    What is the purpose of deducting PAYE from an employee's salary?

    <p>To ensure that taxes are collected regularly throughout the year</p> Signup and view all the answers

    What is the result of applying the tax bracket formula?

    <p>Annual tax</p> Signup and view all the answers

    What is the purpose of calculating the annual tax?

    <p>To calculate the monthly tax</p> Signup and view all the answers

    What is the relationship between the tax threshold and tax rebate?

    <p>Below the threshold, tax is cancelled by the rebate</p> Signup and view all the answers

    What is the purpose of obtaining an IRP5 form from each employer?

    <p>To complete tax returns</p> Signup and view all the answers

    What is the result of subtracting all deductions from the gross salary?

    <p>Net salary</p> Signup and view all the answers

    What is the purpose of calculating the taxable income?

    <p>To identify the correct tax bracket</p> Signup and view all the answers

    What is the primary purpose of calculating the taxable income?

    <p>To determine the amount of income tax owed</p> Signup and view all the answers

    Which of the following deductions is NOT a tax-deductible expense?

    <p>Rent</p> Signup and view all the answers

    What is the relationship between the gross income and taxable income?

    <p>Gross income is taxable income minus tax-deductible deductions</p> Signup and view all the answers

    What is the purpose of using income tax formulas?

    <p>To calculate the income tax owed</p> Signup and view all the answers

    What is the difference between a tax rebate and a tax threshold?

    <p>A tax rebate is a refund, while a tax threshold is the minimum taxable income</p> Signup and view all the answers

    What is the primary purpose of deducting UIF from an employee's salary?

    <p>To provide unemployment benefits</p> Signup and view all the answers

    What is the relationship between the net salary and gross salary?

    <p>Net salary is always less than gross salary</p> Signup and view all the answers

    What is the purpose of using deduction tables?

    <p>To provide a quick reference for determining the amount of tax owed</p> Signup and view all the answers

    What is the purpose of identifying the correct tax bracket?

    <p>To apply the correct tax rate to the taxable income</p> Signup and view all the answers

    What is the result of deducting applicable rebates from the annual tax?

    <p>Net annual tax payable</p> Signup and view all the answers

    What is the purpose of dividing the net annual tax payable by 12?

    <p>To find the monthly PAYE deduction</p> Signup and view all the answers

    What is the effect of tax-deductible deductions on the gross salary?

    <p>Reduces the gross salary</p> Signup and view all the answers

    What is the purpose of subtracting the total deductions from the gross salary?

    <p>To find the net salary</p> Signup and view all the answers

    What is the relationship between the tax threshold and tax rebate?

    <p>The tax threshold determines the tax rebate</p> Signup and view all the answers

    What is the purpose of using the SARS tax tables?

    <p>To identify the correct tax bracket and tax rate</p> Signup and view all the answers

    What is the effect of a tax rebate on the annual tax payable?

    <p>Reduces the annual tax payable</p> Signup and view all the answers

    What is the purpose of calculating the taxable income?

    <p>To identify the correct tax bracket and tax rate</p> Signup and view all the answers

    What is the result of applying the PAYE system?

    <p>Regular tax deductions throughout the year</p> Signup and view all the answers

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