Unit 10 Introduction to Labour Costs Practical Solutions PDF

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UNIT 10: Introduction to Labour Costs practical SOLUTIONS QUESTION 1 1. Calculation of nett pay per week to employee Normal wages

(40 hours x R6/hour) per week

Overtime

(2 x 2 hours x R6/hour x 1.5) per week

Bonus

Not applicable because calculating for the week

Gross wages

R36.00

R276.00

Less pension fund contributions

(0.5 x 10% x 240)

Taxable income Less: Medical Aid deductions

R240.00

(R12.00) R264.00

(0.5 x 6% x 240)

Nett wages per week

(R7.20) R256.80

Part 2 STEP 1: Calculation of productive labour hours Number of weeks per year

52 weeks

Less annual leave

(3 weeks)

Weeks available per year

49 weeks

Hours per week

X 40 hours

Hours available per year

1 960 hours

Less public holidays (hours) (8 days x 8 hours) Number of hours at work Less: idle time

(64 hours) 1 896 hours

(7.5% x 1 896)

Productive Labour Hours

(142.2 hours) 1 753.80 hours

STEP 2: Calculation of cost to the employer Normal wages

(52 weeks x R240)

R12 480.00

Leave Bonus

(3 weeks x R240)

R720.00

Pension

(52 weeks x R12)

R624.00

Medical

(52 weeks x R7.20)

R374.40

Employer’s contributions:

Total cost to the employer

R14 198.40

STEP 3: Calculate the labour recovery rate Labour recovery rate

=

Cost to employer Productive labour hours

=

R14 198.40 1 753.80 hours

=

R8.10 per hour

QUESTION 2

a. Calculation of nett pay per week to employee Normal wages

(45 hours x R5/hour) per week

R225.00

Overtime: Monday to Saturday

(2 hours x R5/hour x 1.5) per week

R15.00

Sundays

(3 hours x R5/hour x 2) per week

R30.00

Total gross remuneration Less: pension fund contributions Taxable income

R270.00 (7.5% x 225)

(R16.88) R253.12

Less: sundry deductions Medical aid fund contributions UIF Net salary payable in cash

(R13.00) (R1.00) R239.12

QUESTION 3

3.1Calculation of labour tariff rate Calculation of total cost to employer Afternoon drive

(6 hours x 5 days x R60 x 52 weeks)

93 600

Voice recordings

(2 hours x 5days x R60 x 1.5 x 52 weeks)

46 800

Saturday Show

(5 hours x R60 x 2 x 12 months)

7 200

Shift allowance

(49 weeks x R50/week)

2 450

Employer contribution

(52 weeks x R45/week) x 2

4 680

Bonus

8 000

Total cost to employer

162 730

Calculation of productive hours Afternoon drive

(6 hours x 5 days x 49 weeks)

1 470

Voice recordings

(2 hours x 5 days x 49 weeks)

490

Saturday Show

(5 hours per month x 12 months)

Total hours Public holidays

2 020 (10 days x 6 hours)

Time spent at work Idle time

(60) 1 960

(10% x 1 960)

Productive hours

Labour tariff

60

(196) 1 764

R162 730/1 764hours =

R92.25 per hour

3.2 Calculation of monthly remuneration Normal pay: Afternoon drive

(6 hours x 5 days x R60 x 4 weeks)

7 200

Voice recordings

(2 hours x 5days x R60 x 1.5 x 4 weeks)

3 600

Saturday Show

(5 hours x R60 x 2)

600

Shift allowance

(R50/week x 4 weeks)

200

Gross remuneration Less: pension fund contributions

11 600 (R45/week x 4 weeks)

(180)

Taxable income

11 420

Less medical aid

(3 000)

Monthly Nett remuneration

8 420...