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Peter Chibwe works at Company XYZ. The following information relates to his performance at work for a single week Normal working hours per week 40 hours Hours worked 48 hours Number of units produced 400 units Normal rate per hour K125.00 Overtime rate 1½ of normal rate Production bonus for every 50 units produced K45.00 Deductions are as follows: i. Pension fund is 7.5% of the normal wage ii. PAYE is 20% of the taxable income on gross wage iii. Unemployment Insurance Fund is 1% of the normal wage and is tax deductible iv. Medical aid is 5% of the normal wage v. K10.00 per week for union membership REQUIRED: (A) Calculate the monthly net wage for Peter Chibwe showing all the detailed calculations (7 marks) (B) Prepare a payslip for Peter Chibwe for the month of February 2022 (7 marks) (C) Discuss fully the remuneration method(s) used by Company XYZ. (6 marks)

Sagot :

azikennamdi

This question discusses Payroll Administration and Management.

Please note that based on the information provided, the weekly gross is K 6,860 the Net Pay is K 4,957  while the monthly Net Pay is K19,828.00.

What is the Definition of Payroll Administration?

Payroll Administration and Management is the activity involved in making sure that the compensation and benefits of the employee for the period that they have spent working are well organized, computed, and administered.

The steps to the solution is given below:

1) Note that the information given above is for one week.

The rate per hour is: K125/Hour.

The rate for overtime is 1.5 of the normal rate

Performance Bonus is K45 for every 50 units.

Given the above, the gross pay for the week is:

Normal Pay + Overtime Pay + Performance Bonus Pay.

a) Normal Pay is given as 125 * 40 = K5,000

b) Overtime Pay is given as (125*1.5) * 8 = K 1,500

c) Performance bonus is given as 45 * (400/50) = K360

d) Total Gross therefore is given as 5,000 + 1,500 + 360 = K 6,860

If gross pay is $6,860, Net Pay is calculated by removing deductions.

Deductions are:

Pension fund = 7.5% of K 6,869 = K 514.5

PAYE Tax = 20% of (95% of 6,869) = K 1,310.24 This is because medical aid is non-taxable.

Employee Insurance = 1% of K 6,860= K 68.6

Union Membership = K 10

The Total Deduction, thus, is = 514.5 + 1,310.24 + 68.6 +10 = K 1,903.34

The Net pay =  Gross Pay Less Deductibles

= 6,860 - 1,903

Thus The Net pay = K 4,957 /Week.

Therefore, his monthly net wage will be:

4, 957* 4 = K19,828.00/Month

B) The kind of remuneration method used by company XYZ is

Time Rate System. Under the time rate system, the worker is paid per hour, per day, per week, or per month.

It is normally used for workers who are engaged in highly skilled jobs or highly skilled services, for example, equipment testing, inspection of operations, toolmaking, etc.

See the link below for more about payroll management:

https://brainly.com/question/541599

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