ACCOUNTI

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Gr
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Chapt
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SALARI
ES&WAGES
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ACTIVITY 1: SALARY SCALE

Year Increment per annum Salary per annum Salary per month

Year 1
87 000 7 250

Year 2
10 470 97 470 8 122,50

Year 3
10 470 107 940 8 995

Year 4
10 470 118 410 9 867,50

Year 5
17 930 136 340 11 361,67

Year 6
17 930 154 270 12 855,83

Year 7
17 930 172 200 14 350

Year 8
20 800 193 000 16 083,33

Year 9
20 800 213 800 17 816,67

2. An employee Ms McGrath started employment on the minimum notch of the salary scale. State her monthly gross
salary.

87 000 ÷ 12 = 7 250
• Her monthly gross salary is R7 250.

3. How many years would she receive increments of R10 470?

Accounting – Grade 10 [Chapter 8 Salaries and Wages] All Rights Reserved.
 • She will receive it for three years.
4. Calculate the percentage increase in her salary in her second year of service.
!"# &##
10 $" ###
× &
= 12,03%

5. If Ms McGrath resigned in her seventh year of service, what salary per annum would she have been receiving?

• She would have been receiving R172 200 per annum / per year.

6. Write up a salary scale using the following information:

● Starting figure: R35 000 per month.

● An annual increase of 15% p.a. of the minimum salary is applicable for three years; thereafter the increment changes to
20% p.a. of the minimum salary for two years.
35 000 × 5 250 − 50 750 × 10 150 − 71 050

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ACTIVITY 2: BASIC CALCULATIONS

1. Use the Tax table below to calculate the SARS (PAYE) Pay as you earn yearly tax deduction for Mrs Havana.

17 300 × 12 = 207 600

18
207 600 × = 37 368
100

2. How much tax is taken off her salary each month?

37 368 ÷ 12 = 3 114

3. How much is the total monthly premium for Mrs Havana’s medical aid?

R1 200.

4. How much of the monthly premium will Youth Care contribute towards Mrs. Havana’s medical aid?

The employer contributes R2 for every R1 paid by the employee.

1 200 ÷ 3 × 2 = 800

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 5. How much of the monthly premium will Mrs Havana contribute?

1 200 − 800 = 400

6. Why is it beneficial for the company to contribute to the medical aid fund?

With medical care, their employees are more likely to receive better care and can, therefore, recover quicker and spend less time off
work. Increasing the productivity of the business.
7. How much of the monthly premium will Youth Care contribute towards Mrs Havana’s pension fund?

10
17 300 × = 1 730
100
8. What is the balance that Mrs Havana will have to contribute towards her pension fund?

7,5
17 300 × = 1 297,50
100
9. How much is the total monthly premium for Mrs Havana’s pension fund?

Employer’s contribution + Employees deduction = total paid to fund on employee’s behalf

1 730 + 1 297,50 = 3 027,50
10. What is Mrs Havana’s take home (net salary) at the end of the month?

Gross Salary − deductions = net salary

17 300 − 3 114 − 400 − 1 297,50 − 173 − 35 = 12 280,50

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 11. All people earning a salary, or a wage are required to contribute to the Unemployment Insurance Fund (UIF). What is the
percentage of the employee’s gross salary must the employee and employer each contribute to the fund?
The employee and the employer must each contribute 1% of the employee’s gross salary to the fund.

12. What is the purpose of the Skills Development Act? What percentage of their total wage and salary bill must each
business pay this fund?
The purpose of the Skills Development Act is to develop the skills of the South African workforce as well as those people who are
unemployed. Every business is required to pay 1% of their wage and salary bill towards the funding of this fund.
13. The main function of a trade union is to represent the employees at their place of employment and to maintain
industrial peace at the workplace. List the main activities of a trade union.
▪ Help in effective communication between the workers and the management.
▪ Highlight unfair labour practise and set procedures to eliminate such practices.
▪ Seek a reasonable increase in salaries and wages from time to time.
▪ Represent individual workers when there is a dispute with the employer or management.
▪ Organise courses for their members on a wide range of matters.
▪ Seek healthy and safe working environment for union members.

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ACTIVITY 3: SALARIES AND WAGES JOURNALS

Salaries Journal of JT Traders for August 2022 SJ8

Name Basic Bonus Gross Total Net

Salary Salary Deduc Salary
Deductions tions Contributions

PAYE Pensi Medic UIF Uni Pensio Medical UIF Ski

on al Aid on n Aid lls
Fun lev
d y

E 24 216 0 24 216 5 623 2 422 1 300 242 30 9 617 14 599 6 055 1 300 242 242
Conrad
ie
L Tlopa 19 628 14 721 34 349 6 360 1 963 1 000 196 30 9 549 24 800 4 908 1 000 196 196

M 9 146 0 9 145 2 588 915 900 91 30 4 524 4 621 2 288 900 91 91

Benade

52 990 14 721 67 710 14 571 5 300 3 200 529 90 23 690 44 020 13 251 3 200 529 529

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 Wages Journal of JT Traders for the week ending 26 August 2022 WJ 8-4

Nam Basi Over Over Amo Gross Total Net

e c time time unt Wage Dedu Wage
Wag Hour Rate s Deductions ctions s Contributions
e s

PAY Pens Medi UIF Unio Pens Medi UIF Skill

E ion cal n ion cal s
Aid Fun Aid levy
d

S 1 10 68 680 2 480 225 180 125 18 8 586 1 894 450 125 18 18

Wem 800
ba
A 1 80 10 68 680 2 480 225 180 125 18 8 586 1 894 450 125 18 18
Mast 0
ers
M 960 5 45 225 1 185 74 96 90 10 8 278 907 240 90 10 10
Wyer
s
4 1 6 145 524 456 340 46 24 1 390 4 755 1 340 46 46
560 585 140

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ACTIVITY 4: CASH PAYMENTS JOURNAL AND POSTING TO THE GENERAL LEDGER

Cash Payments Journal of JT Traders for September 2022 CPJ 9

Doc Day Details Fol Bank Creditors Sundry Accounts

for wages
Amount Fol Details
B/S 2 Cash 4 507 4 507

EFT 7 STAR MED 11 220 11 220 B Medical Aid: START MED

EFT Momentum 29 226 29 226 B Pension Fund: Momentum

EFT SARS 2 331 1 554 B UIF

777 B Skills development Fund

B/S 9 Cash 4 507 4 507

B/S 16 Cash 4 507 4 507

B/S 23 Cash 4 507 4 507

EFT 25 Sundry Employees 31 950 31 950 B Creditors for Salaries

B/S 30 Cash 4 507 4 507

EFT 30 SARS 14 541 14 541 B SARS PAYE

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 GENERAL LEDGER OF JT TRADERS
BALANCE SHEET ACCOUNTS SECTION
SARS – PAYE CL B
2022 2022
30 Bank CPJ 14 541 2 Wages WJ9-1 524
Sept Sept
9 Wages WJ9-2 524
16 Wages WJ9-3 524
23 Wages WJ9-4 524
30 Wages WJ9-5 524
30 Salaries SJ9 11 921

Medical Aid Fund: STAR MED CL B

2022 2022
7 Bank CPJ 11 220 1 Balance b/d 11 220
Sept Sept
30 Balance c/d 9 800 2 Wages WJ9-1 340
Medical Aid
2 WJ9-1 340
Contribution
9 Wages WJ9-2 340
Medical Aid
WJ9-2 340
Contribution
16 Wages WJ9-3 340
Medical Aid
WJ9-3 340
Contribution
23 Wages WJ9-4 340
Medical Aid
WJ9-4 340
Contribution
30 Wages WJ9-5 340
Medical Aid
WJ9-5 340
Contribution
30 Salaries SJ9 3 200
Medical Aid
SJ9 3 200
Contribution
21 020 21 020
2022
1 Balance b/d 9 800
Oct

Accounting – Grade 10 [Chapter 8 Salaries and Wages] All Rights Reserved.

 Pension Fund: Momentum CL B
2022 2022
7 Bank CPJ 29 226 1 Balance b/d 29 226
Sept Sept
30 Balance c/d 31 874 2 Wages WJ9-1 688
Pension fund
2 WJ9-1 1 960
Contribution
9 Wages WJ9-2 688
Pension fund
WJ9-2 1 960
Contribution
16 Wages WJ9-3 688
Pension fund
WJ9-3 1 960
Contribution
23 Wages WJ9-4 688
Pension fund
WJ9-4 1 960
Contribution
30 Wages WJ9-5 688
Pension fund
WJ9-5 1 960
Contribution
30 Salaries SJ9 5 300
Pension fund
SJ9 13 334
Contribution
61 100 61 100
2022
1 Balance b/d 31 874
Oct

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 UIF CL B
2022 2022
7 Bank CPJ 1 554 1 Balance b/d 1 554
Sept Sept
30 Balance c/d 1 678 2 Wages WJ9-1 62
2 UIF Contribution WJ9-1 62
9 Wages WJ9-2 62
UIF Contribution WJ9-2 62
16 Wages WJ9-3 62
UIF Contribution WJ9-3 62
23 Wages WJ9-4 62
UIF Contribution WJ9-4 62
30 Wages WJ9-5 62
UIF Contribution WJ9-5 62
30 Salaries SJ9 529
UIF Contribution SJ9 529
3 232 3 232
2022
1 Balance b/d 1 678
Oct

Skills Development Fund CL B

2022 2022
7 Bank CPJ 777 1 Balance b/d 777
Sept Sept
30 Balance c/d 839 2 SDL Contribution WJ9-1 62
9 SDL Contribution WJ9-2 62
16 SDL Contribution WJ9-3 62
23 SDL Contribution WJ9-4 62
30 SDL Contribution WJ9-5 62
SDL Contribution SJ9 529
1 616 1 616
2022
1 Balance b/d 839
Oct

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 GENERAL LEDGER OF JT TRADERS
NOMINAL ACCOUNTS SECTION

Salaries (e) N
2022
1 Total b/f 423 920
Sept
30 Gross Salary SJ9 52 990
476 910

Wages (e) N
2022
1 Total b/f 196 640
Sept
2 Gross Wages WJ9-1 6 145
9 Gross Wages WJ9-2 6 145
16 Gross Wages WJ9-3 6 145
23 Gross Wages WJ9-4 6 145
30 Gross Wages WJ9-5 6 145
227 365

Medical Aid Contribution (e) N

2022
1 Total b/f 44 880
Sept
2 Medical Aid Fund WJ9-1 340
9 Medical Aid Fund WJ9-2 340
16 Medical Aid Fund WJ9-3 340
23 Medical Aid Fund WJ9-4 340
30 Medical Aid Fund WJ9-5 340
30 Medical Aid Fund SJ9 3 200
49 780

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 Pension fund Contribution (e) N
2022
1 Total b/f 169 392
Sept
2 Pension Fund WJ9-1 1 960
9 Pension Fund WJ9-2 1 960
16 Pension Fund WJ9-3 1 960
23 Pension Fund WJ9-4 1 960
30 Pension Fund WJ9-5 1 960
30 Pension Fund SJ9 13 334
192 526

UIF Contribution (e) N

2022
1 Total b/f 6 216
Sept
2 UIF WJ9-1 62
9 UIF WJ9-2 62
16 UIF WJ9-3 62
23 UIF WJ9-4 62
30 UIF WJ9-5 62
30 UIF SJ9 529
7 055

Skills Development Fund Contribution (e) N

2022
1 Total b/f 6 216
Sept
2 SDL WJ9-1 62
9 SDL WJ9-2 62
16 SDL WJ9-3 62
23 SDL WJ9-4 62
30 SDL WJ9-5 62
30 SDL SJ9 529
7 055

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ACTIVITY 5: EXAM TYPE QUESTION

Salaries Journal of DEJ Stores for July 2022 SJ7

Name Basic Total Net

Salary Deductio Salary
Deductions ns Contributions

PAYE Pension Medical UIF Pension Medical UIF

Aid Aid

Zinzi 29 000 5 220 2 230 560 290 8 300 20 700 5 800 1 120 290

5.1 Arthur 19 000 3 420 1 520 850 190 5 980 13 020 3 800 1 700 190

48 000 8 640 3 750 1 410 480 14 280 33 720 9 600 2 820 480

Accounting – Grade 10 [Chapter 8 Salaries and Wages] All Rights Reserved.

 5.2 Answer the questions that follow:

a) What do the following abbreviations stand for?

• PAYE – Pay as you earn
• UIF - Unemployment Insurance Fund
b) Briefly explain the difference between “deductions” and “contributions”.

• Deductions is the amount that is deducted from the employee’s salary.

• Contributions are additional expenses for the business and are made by the employer on
behalf of the employees.
c) How much money must be paid to the pension fund on the 31 July 2022?

3 750 + 9 600 = 13 550

d) One of the employees of this business is of the opinion that by joining a pension fund he
is wasting his money. Do you agree with him? Provide a reason for your answer.
NO…. It provides a guaranteed income when the employee retires.
OR
YES…. If he can invest this money in an investment that will give him a better return over the long run.
However, he should make provision for his retirement one day.
e) Apart from paying them a salary an employer can also grant “fringe” benefits to his
employees. One such example is a housing allowance. Name two other “fringe” benefits
which can be provided by an employer.
A fringe benefit is any NON-salary (non-cash) benefit granted to the employee by the employer.
E.g.
• Car allowance
• Cell phone allowance
• Paid medical leave
• Paid leave days, etc.
f) DEJ Stores made an EFT payment to SARS to settle the PAYE for July 2022. Name the
accounts to be debited and credited.
Account Debited Account Credited Amount
SARS – PAYE (CL) − Bank (CA) + R 8 640

Accounting – Grade 10 [Chapter 8 Salaries and Wages] All Rights Reserved.

 g) Name the account to be debited and credited when posting the net salary from the
salaries journal to the general ledger.
Account Debited Account Credited Amount
Salaries (e)+ Creditors for Salaries (CL)+ R33 720
h) Name the account to be debited and credited when posting the pension fund
contributions from the salaries journal to the general ledger.
Account Debited Account Credited Amount
Pension fund Contribution (e)+ Pension fund (CL)+ R9 600

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ACTIVITY 6: EXAM TYPE QUESTION – CONCEPTS, SALARIES AND WAGES AND ETHICS

6.1 Indicate whether the following statements are TRUE or FALSE. If false provide the correct
answer.
a) The acronym SDL stands for Skills development Levy.

TRUE

b) SDL is paid by employers whose payroll exceeds R300 000.

FALSE. Every employer who is registered with SARS for PAYE and who has an annual payroll (total
salaries and wages including bonuses, commission, etc.) in excess of R500 000 (approximately R41
000 per month), or 50 plus staff members is required to pay skill levies.
c) UIF is normally 1% of the net salaries.

FALSE. UIF is calculated as 1% of the GROSS salary.

d) Net salaries are also known as creditors for Salaries

TRUE

e) PAYE must be paid over to the Treasury.

FALSE. PAYE is paid over to SARS

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 Wages Journal of JT Traders for August WJ 8

Week Gross Total Net Wage

Ending Wages Deductions Deductio Contributions
ns
PAYE Pension Medical UIF Pension Medical UIF Skills
Aid Aid levy

19 Aug 2 874 804 160 240 28,74 1 232,74 1 641,26 320 240 28,74 28,74

26 Aug 3 078 882 164 240 30,78 320 240 30,74

Salaries Journal of JT Traders for August 2022 SJ8

GROSS Total Net

Salary Deductions Deductio Salary Contributions
ns
PAYE Pension Medical UIF Pension Medical UIF Skills
Aid Aid Levy

21 110 8 220 1 480 1 450 2 11,10 11 361,10 7 849 2 960 2 175 2 11,10 2 11,10

Accounting – Grade 10 [Chapter 8 Salaries and Wages] All Rights Reserved.

 6.3 Answer the following questions:

6.3.1 Provide the double entry for Pension Contributions in the Salaries Journal.

Account Dr Account Cr Amount

Pension Contribution Pension Fund R2 960
6.2.2 The net salary calculated in 6.2.5 of the Salaries Journal would be posted to the
Salaries Account in the ledger and which other account?
Creditors for Salaries

6.4 The owner Mr T Ndebele decided that he would not pay the money over for PAYE this
month as he needed the cash, he will make a double payment the next month. Why are
you against the decision he took? Provide consequences of this action on ONE point.
Unethical / Fraud money belongs to SARS.
Consequences
Late payment penalty / levy will be imposed by SARS

Accounting – Grade 10 [Chapter 8 Salaries and Wages] All Rights Reserved.