CAS3701 Assignment 11 (COMPLETE ANSWERS) 2024 - DUE 13 September 2024
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Course
CAS3701
Institution
University Of South Africa
CAS3701 Assignment 11
(COMPLETE ANSWERS)
2024 - DUE 13 September
2024.... 100% TRUSTED Answers, guidelines, workings, and references....QUESTION 1 1. BACKGROUND LearnCo. Limited (LearnCo.) is a top training provider that offers skills development training solutions to businesses and government i...
CAS3701 Assignment 11
(COMPLETE ANSWERS)
2024 - DUE 13 September
2024
, TASK 1
a) Registration of Non-Facilitator Employees as Taxpayers
Under the Income Tax Act (specifically Section 69), all individuals who earn income above
the tax threshold are required to be registered as taxpayers. The threshold for tax
registration in South Africa is generally based on age and income level, with different limits
for those under and over 65. Given that these five employees earn R15,000 per month
(R180,000 per annum), they are likely above the tax threshold and must be registered for tax
purposes.
The Tax Administration Act further mandates that all employers must deduct Pay-As-You-
Earn (PAYE) taxes from their employees' salaries and pay these over to SARS. Failure to
comply can result in penalties for the employer. The CFO's failure to deduct taxes and
register these employees is a breach of tax compliance, even if the intention was to protect
the financial well-being of the employees. These employees should be treated like any other
full-time staff in terms of tax compliance, and their salaries must be subject to PAYE
deductions.
b) Recommended Treatment of Employees' Salaries
To correct the current incorrect treatment of the salaries of these five non-facilitator
employees, the following steps should be taken:
Financial Records:
The five employees must be added to the payroll system (Revolve X) and included in the
employee database.
The R15,000 salary should be reclassified from "general expenses" to "employee expenses"
on the payroll, where taxes, medical aid, provident fund contributions, and UIF deductions
should be applied.
PAYE must be backdated and deducted from their salaries since the beginning of their
employment in the current financial year. Failure to backdate the deductions could lead to
penalties from SARS.
Non-Financial Records:
The employees should be registered with SARS for tax purposes, and their tax numbers
must be obtained.
Employee contracts should be drawn up and stored in the employee records database in
Revolve X.
The payroll and HR departments should ensure that the employees are registered for any
applicable statutory benefits such as UIF and medical aid contributions.
The CFO should also review the current payroll process to avoid such discrepancies in the
future.
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