5.1 Marius, who is 64 years old, earned an annual taxable income of R551 762,00 for the 2019/20 tax year - NSC Mathematical Literacy - Question 5 - 2021 - Paper 1

To calculate the tax payable:

1. Calculate the amount above R555 600:

   Taxable income = R551 762

   Amount over R555 600 = R551 762 - R555 600 = -R3 838 (no tax applies since income is below this threshold).

2. Since Marius is in the lower threshold of the 4th bracket, we need to calculate his tax based on the previous bracket (R423 301 to R555 600):

   Tax payable = R100 263 + 36% of (R551 762 - R423 300)

   Tax payable = R100 263 + 36% of R128 462

   Tax payable = R100 263 + R46 242.32

   Tax payable = R146 505.32.

To verify Marius's statement, calculate the change in tax if he were one year older:

1. If Marius were one year older, he would qualify for an additional R7 794 rebate instead of R7 794 for being aged 64.

2. Calculate the new annual tax payable:

   New annual tax = R146 505.32 - R7 794

   New annual tax = R138 711.32

3. Calculate monthly tax:

   New monthly tax = R138 711.32 / 12 = R11 559.44.

4. Old monthly tax = R146 505.32 / 12 = R12 208.78.

5. Monthly savings = R12 208.78 - R11 559.44 = R649.34.

Since R649.34 is more than R600, Marius's statement is indeed correct.

For the medical fund:

1. Main member: R601
2. One wife: R310
3. Two grandchildren (2 x R209): R418

Total monthly credits = R601 + R310 + R418 = R1 329.