Question

Helen Ming receives a travel allowance of $180 each week from her company for time away from home. If this allowance is taxable and she has a 24 percent income tax rate, what amount will she have to pay in taxes for this employee benefit?

Answer 1

She has to pay $2246.4 in taxes for this employee benefit.

Explanation:

First find the annual travel allowance equal to weekly allowance x 52 weeks = $180 x 52 = $9,360

When you get the annual travel allowance, find the annual tax.

Annual tax =Annual travel allowance × Tax rate

=$9,360 × 0.24

=$2,246.40