Prove why diannas employer is indifferent to providing


Problem

Dianna has performed very well in her salesperson's role during July 2022. Her employer wants to reward her with a cash bonus of $1,000 after the deduction of PAYE or a fringe benefit in the form of a gold bracelet to the value of $1,000 - it is Diana's choice. Diana's marginal tax rate is 33%.

Task

Prove why Dianna's employer is indifferent to providing her with the fringe benefit valued at $1,000 or the after-tax cash bonus of $1,000.

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Taxation: Prove why diannas employer is indifferent to providing
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