Principles of Taxation Assignment 1: Payroll, GST, and FBT Analysis

This assignment provides a detailed analysis of taxation principles, specifically focusing on payroll calculations, Goods and Services Tax (GST), and Fringe Benefits Tax (FBT). The student calculates payroll information, including weekly wages, PayG, and quarterly figures for various employees. It also includes the computation of employer's Superannuation Guarantee obligations. Furthermore, the assignment analyzes assessable receipts, deductible expenses, and the calculation of net income from a business, including GST payable. The student also addresses GST credits and provides a summary of the BAS (Business Activity Statement), including GST on sales and purchases, and PAYG tax withheld. The assignment demonstrates a practical understanding of tax regulations and their application in a business context.

Running head: PRINCIPLES OF TAXATION
Principles of Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

1PRINCIPLES OF TAXATION
Table of Contents
Answer to question A:.....................................................................................................................2
Answer to question B:.....................................................................................................................2
Answer to question C:.....................................................................................................................3
Answer to question D:.....................................................................................................................5
Answer to question E:......................................................................................................................6
References:......................................................................................................................................8

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Answer to question A:
Calculations of Payroll Information:
Employee Name Weekly Wages / Salary Weekly PayG Quarterly Wages/Salary Quarterly PayG
Kris 120 25 1560 325
Sam 220 49 2860 637
Sarah 4000 1528 52000 19864
Lauren 1440 458 18720 5954
Marty 5600 2280 72800 29640
Paul 2200 755 28600 9815
Schedule of Payroll Information
Employee Name Kris Sam
Week 1 120 220
Week 2 105 220
Week 3 150 330
Week 4 180 330
Week 5 0 220
Week 6 0 220
Week 7 75 330
Week 8 180 330
Week 9 150 220
Week 10 180 220
Week 11 120 330
Week 12 120 220
Week 13 120 0
Total Wages 1500 3190
Payroll Information
Answer to question B:
Computation of employer’s statutory Superannuation Guarantee obligations

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Employee Name Super Fund Name Ordinary time earnings SG rate SG Contributions
Kris State Super Retirement Fund 1500 9.50% 142.5
Sam State Super Retirement Fund 3190 9.50% 303.05
Sarah State Super Retirement Fund 4000 9.50% 380
Lauren State Super Retirement Fund 1440 9.50% 136.8
Marty State Super Retirement Fund 5600 9.50% 532
Paul State Super Retirement Fund 2200 9.50% 209
1703.35Toal Employers Contributions
Superannuation Guarantee Obligations
Answer to question C:
Item Value Supply Type Reference/Authority GST Input tax Credit ($)
Assesssable Receipts 11000 1000
Training Fees 82698
Taxable Sales (Supply
made in ordinary business
course) Section 9-5 & Section 9-10 7518
Share of prize money from customers horses 55000
Taxable Sales (Supply
made in ordinary business
course) Section 9-5 & Section 9-10 5000
Prize money from Bronny horses 16500
Taxable Sales (Supply
made in ordinary business
course) Section 9-5 & Section 9-10 1500
Trophy from Brisbane Cup 1200
Taxable Sales (Supply
made in ordinary business
course) Section 9-5 & Section 9-10 109.09
Trade in tractor 1900
Taxable Sales (Supply
made in ordinary business
course) Section 9-5 & Section 9-10 172.73
Total Receipts 157298 14299.82
Expenses Eligible as Deductions
Horse Feed 8800 Input Tax Sales Section 9-5 800
Veterinary Fees 7700 Input Tax Sales Section 9-5 700
Ferrier 5500 Input Tax Sales (No GST Included)
Accomodation for Staff 2475 Input Tax Sales Section 9-5 225
Airfares for staff 5346 Input Tax Sales Section 9-5 486
Bookkeeping services 2640 Input Tax Sales Section 9-5 240
First Aid courses for staff members 990 Input Tax Sales Section 9-5 90
Cost of Goods Sold 4500 Imported Goods Section 9-5 409
Freight 250 Imported Goods Section 9-5 23
Business loan 750 Input Tax Sales
Total Allowable Deductions 38951 2972.818182
Net Income from business 118347
Total GST Payable 11327.00
According to “section 6-5 of the ITAA 1997” ordinary income is considered as the
income that a taxpayer receives during the ordinary business process. Clearly “section 995-1 of

4PRINCIPLES OF TAXATION
the ITAA 1997” outlines business as things that includes profession, trade and inclination or
employment but does not considers the occupation of the employee (Pinto 2013). The business is
monitored and noticed for GST, therefore, the services and goods sold in Australia will be liable
for taxation unless they are declared as GST-tax free input.
Brain reports the revenues of training payments. So in this case according to “section 6-5
of the ITAA 1997” training payments will be considered as ordinary business revenues and also
will be considered as taxable. Later Brain reports the revenues from the prize shares for
customer’s horses. In the later part of the case, Brian reported $1200 amount revenue from the
Brisbane Cup. According to the “Moore v Griffiths (1972)” simple prize will be considered as
income if the taxpayer is involved in these activities in a regular manner (Woellner, et al. 2016).
The trophy for Bronny Park is also considered as the taxable as this was Brain’s regular activity.
Conferring to “Kelly v FCT (1985)”, the taxpayer is considered to be rewarded for being
a good and fairest player (Robin 2017). Therefore, the received amount will be considered as
taxable as this is generating revenues for the taxpayer. Brain has received Trade-in- of tractor
which was also considered as ordinary business under “section 6-5 of the ITAA 1997”,
therefore, this was included for assessment purpose.
Rendering to the “section 8-1, ITAA 1997” any taxpayer is permissible to claim for his
allowed deduction or the outlay those are involved at the time calculating the taxable income
(Blakelock and King 2017). As an evident Brain has expense for horse fees and veterinary fees
during the course of his trade. Therefore according to “section 8-1 of the ITAA 1997”, he will be
permitted to claim for taxable income. Depending upon the general provision of “section 8-1 of

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the ITAA 1997”, expenditure will be considered for presumption those were included at the
deriving the assessable income.
Answer to question D:
In relation with the ATO, a taxpayer is allowed to claim for GST credits but the condition
is there must be the GST included into the transaction. Following are the conditions those are
addressing claiming process for GST-
a. The taxpayer should use the purchase amount wholly or partially for the business usages
b. GST should be included into the purchase
c. Taxpayers are bounded to the conditions for providing the information related to the
items bought for the business
d. Suppliers will be giving the invoices to the taxpayers for their tax payments
According to the “section 11-5 of the ITAA 1997” creditable can be well-defined as any
item that is acquired by the taxpayer, either partially or wholly (Robin 2017). According to the
case scenario, the creditable transactions will be horse feed, tractor, fees for bookkeeping, and
fees for veterinary, leather goods those were imported from Europe. All these items were
acquired solely for creditable purpose.

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Answer to question E:
BLANK BAS
FIELDS
OPTION 1: Calculate GST & report quarterly SUMMARY
1A GST on Sales $14299
G1 Total Sales $1,57,29
8
1C WET $-
Does G1 include GST Y/N 1E LCT $-
G2 Export Sales $- 4 PAYG Withheld $66,23
5
G3 Other GST-Free Sales $- 5A PAYG income tax
instalment
$16,79
0
G10 Capital Purchases $- 6A FBT instalment $-
G11 Non-capital Purchases $- 7C FTC over claim $-
8A $-
PAYG tax withheld
1B GST on purchases $2972
W1 Total Salary & Wages $1,76,54
0
1D WET refundable $-
W2 Amount Withheld $- 1F LCT refundable $-
W4 No ABN $- 5B PAYG instalment credit $-
W3 Other amount $- 6B FBT credit $-
W5 total amounts withheld $- 7D FTC credit $-
8B $-
OPTION 1: Pay a PAYG instalment amount quarterly
PAYMENT OR REFUND
T7 $66,235
Is 8A more than 8B? YES
FBT INSTALMENT
Your payment amount $11327
F1 $-
F2 Est FBT for year $2,500-
F3 Varied amount payable $-
F4 Variation Code

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References:
Blakelock, S. and King, P., 2017. Taxation law: The advance of ATO data matching. Proctor,
The, 37(6), p.18.
Pinto, D., 2013. State taxes. In Australian Taxation Law (pp. 1763-1762). CCH Australia
Limited.
Robin, H., 2017. Australian taxation law 2017. Oxford University Press.
Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation Law
2016. OUP Catalogue.