Question

#6) (14 Marks) Compute Net Employment Income: Mrs. Jennifer Sparvier is the Vice President of GPB Inc., a public corporation listed on the Toronto Stock Exchange. During 2017, Jennifer received the following: $85,000 Gross Salary Deductions at Source: CPP ΕΙ Income Tax Withheld RPP Employee Contributions Employee Contributions to Registered Charity Employee Reimbursement for Company Vehicle $2,564 836 20,000 6,000 1,000 500 30,900 $54,100 Net Pay GPB Inc. contributed the following amounts on behalf of Jennifer: Employer RPP Contributions to Pension Plan Employer Dental Plan Premiums Paid Employer Portion of Group Term Life Insurance $3,500 700 250

Answer 1

Solution

Calculation of Net Employment Income of Jennifer Sparvier:

Particulars	Amount ($)	Amount ($)
Net Pay (given as per question)		54,100
Add: Net personal benefit by using the car provided by the Company (Note1)	1,330
Add: Jennifer's Portion of expense regarding the trip	4,300
Add: Hamper and Gift Card benefit provided	700
Add: Membership expense paid by company	1,500
Add: Bonus relating to 2017	5,000
Add: Medical expense paid by the company	1,000
Add: Saving on medicine bills due to discount provided by company	700	14,530
Net Employment Income		68,630

Therefore, Jennifer Sparvier's net employment income for 2017 is $ 67,530

Working Note:

1) Calculation of Net personal benefit from Car provided:

Total expense paid by Company = 5,500 + (650)*12 = $ 13,300

The car was used for 4,000kms for personal use out of 40,000kms

Therefore, the Net personal benefit from Car provided = 13,300 * 4000km/40000km

= $1,330