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Business Studies Question (1 Viewer)

hsienerddd345

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Sorry I must be really stupid but I can't seem to figure out how to find the rate in this question (got an answer but doubting it).

Screen Shot 2021-08-26 at 4.12.55 pm.png

I chose Fringe benefits tax (but I could be wrong) from the following choices:
Screen Shot 2021-08-26 at 4.15.19 pm.png

But yeah if my answer for the type of tax is wrong then please correct me.

In summary, I really just wanna know how to calculate the rate per employee because
I added the benefits together and just multiplied it by 48.5% and got $17 945. I'm basically wondering whether this would be the answer or whether I'd have to approach the question differently.

Cheers.
 

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jimmysmith560

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Your answer for the type of tax is correct because company cars, education grants and healthcare can be classified as fringe benefits. Recall the definition of a fringe benefit:

- an extra benefit supplementing an employee's money wage or salary, such as a company car, private healthcare, etc.

There is a step that involves determining the fringe benefit taxable amount. The rationale here is that the fringe benefits taxable amount is obtained by `grossing-up' the aggregate fringe benefits amount, to a tax-inclusive amount, to ensure that fringe benefits are taxed on the same basis as salary or wages, which is done using this formula:







You then multiply this amount by the fringe benefits tax rate:



This would be the tax paid for each employee. What I'm not entirely sure of is whether you're actually required to know this or whether you're expected to just directly multiply $37000 by 48.5%, which would give your answer. I wouldn't believe that you are required to be familiar with the above as this is beyond the scope of the syllabus, plus you won't be dealing with tax calculations in year 12. Instead you will be required to calculate financial ratios.

I hope this helps! 😄
 

hsienerddd345

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Your answer for the type of tax is correct because company cars, education grants and healthcare can be classified as fringe benefits. Recall the definition of a fringe benefit:

- an extra benefit supplementing an employee's money wage or salary, such as a company car, private healthcare, etc.

There is a step that involves determining the fringe benefit taxable amount. The rationale here is that the fringe benefits taxable amount is obtained by `grossing-up' the aggregate fringe benefits amount, to a tax-inclusive amount, to ensure that fringe benefits are taxed on the same basis as salary or wages, which is done using this formula:







You then multiply this amount by the fringe benefits tax rate:



This would be the tax paid for each employee. What I'm not entirely sure of is whether you're actually required to know this or whether you're expected to just directly multiply $37000 by 48.5%, which would give your answer. I wouldn't believe that you are required to be familiar with the above as this is beyond the scope of the syllabus, plus you won't be dealing with tax calculations in year 12. Instead you will be required to calculate financial ratios.

I hope this helps! 😄
omggg u life saver 😭
 

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