Problem
Prendy is employed to the Ria Investment Limited as a Branch manager. For the year 2017 he received a basic salary of $300,000 per month and travelling allowance of $25,000 per month. Prendy contributes to an approved pension fund at the rate of 10% of his basic salary.
Ria Investments Ltd. owns and fully maintains the motor vehicle Prendy uses in his employment. The travelling allowance granted by the Revenue dept. to its travelling officers may be taken as $250,000 per annum. The motor vehicle provided by Ria had a cost of $1,450,000 in 2013 and the estimated private use of Prendy is 60%.
Prendy received a meal allowance of $95,000 for the year. Of this amount, $40,000 related to overtime work done for the year.
Prendy's employer pays an annual rent of $1,000,000 to an unconnected landlord on his behalf. Prendy is required to live in the particular accommodation for reasons connected with performing his job more efficiently and effectively.
Prendy also receives a uniform allowance of $30,000 per annum at the start of each year. During the year of assessment, Prendy received a gift of $50,000 from Ria for his branch being voted Branch of the year in the company's award ceremony on December 15, 2017. Ria also pays for Prendy's sons tuition fee of $500,000 directly to the University of the West Indies.
The Bank provided Prendy with the use of a cell phone. Prendy does not require a phone for the efficient or effective performance of his duties. The Bank has agreed that it will pay a maximum of 5,000 per month for his cell phone expenses. During the year he incurred a total of $76,500 of cell phone charges.
The Bank also provides Prendy with a credit card. During the year, his private expenditures amount to $320,000. Prendy reimbursed the Bank $70,000 for these expenditures.
Task
Calculate Prendy's net pay for the year of assessment 2017. Show all workings. State explicitly any assumptions which you deemed necessary to make in approaching this problem. The Tax Threshold to be applied is $1,500,096.