Income earned through a job with other benefits is known as employment income . And this is taxable under employment income. If an employee switches a job from one company to another company then employment income includes both , previous one and the current one .
As in exams employment income should be calculated in a proper sequence and through proper procedures. So for this, there is a format which should be strictly followed.That,s why
i prepared a format for this to calculate it,using my knowledge and understandings of tax and this topic.Hope so it will work for you and make it easy for you to calculate employment income in exams correctly. Employment income format /proforma is given below:
Mr. A
Calculation of employment income
for the tax year XYZ
£ £
Salary x
Bonus x
Commission x
Incentives x
Pension x
Tips x
Benefits in Kind* x
_____
xx
_____
Total emoluments xx
Less: Allowable deductions (xx)
Taxable income from employment xx
What are Benefits in Kind ?
These are those benefits , which an employee receives from his employer other than money as
part of his/her total employment compensation package.These include accommodation benefit ,
car benefit ,fuel benefit,loan benefit etc.There are no specific formats for the calculation of these benefits for tax purposes.These benefits can be calculated by use of formula and bookish rules
which are subject to change after the end of every tax year.
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