Question Tag: Bonus

i) Payment for Overtime:

• If an employer pays a qualifying junior employee overtime, withholding tax is applied at 5% if the overtime does not exceed 50% of the basic salary.
• If it exceeds, the excess is taxed at 10%. For non-qualifying employees, the payment is taxed at graduated rates.

(2 marks)
ii) Payment for Bonus:

• Bonus payments up to 15% of the annual basic salary are taxed at 5%. Any excess over 15% is taxed at the graduated rates.

(2 marks)
iii) Payment to Casual Workers:

• Payments to casual workers are subject to a 5% withholding tax, treated as a final tax.

(1 mark)
iv) Payment to Temporary Staff:

• Payments to temporary staff are taxed in accordance with the graduated rates of the Income Tax Act, 2015 (Act 896)

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(1 mark)