Finance

Income tax, UIF and VAT

SARS tax brackets. UIF at 1% of gross. VAT 15%. Read the table they staple into the paper.

CAPS

Grade 12 · Mathematical Literacy · Finance

Mathematical Literacy uses a context, not a bare sum.

Two papers
Paper 1 uses familiar contexts: pay slips, till slips, maps you have seen, and data in a table. Paper 2 uses less familiar contexts and expects you to decide which method fits. Both papers are 150 marks.
What to show
Write the value with its unit or its rand sign. Say whether you multiply or divide, and round only at the end, in the way the question asked (nearest rand, one decimal place, a whole number of tiles).
The relation
tax = rebate subtracted from bracket tax UIF = 0.01 × gross. Personal income tax sketch
How a marker reads it
Always use the tax table in that paper. Brackets change. Show the rebate subtraction as its own line.

A correct number with the wrong unit, or a VAT amount treated as the full price, loses the mark the context was testing.

Diagram

Worked example

Gross monthly salary R8 000. Employee UIF at 1%. UIF deducted?

Before any working — hunt first

Given

Numbers and units already in the sentence: R8 · 000 · 1%. Copy each one into a column. A name without a number is not given.

Missing

After you copy the given, the letter that still has no number is missing. The paper is pointing at: UIF deducted. Circle that word — that is the missing variable.

Find

We are required to find: UIF deducted. Write that as a symbol on the left, with a question mark, before you touch a formula.

Calculate

Write tax = rebate subtracted from bracket tax UIF = 0.01 × gross with empty letters. Cross out every letter that already has a number. Calculate the letter that is still standing — that gives UIF deducted.

Simplified approach

1% of 8 000.

Culture note

A payslip from a mine in Thabazimbi prints UIF as a line of its own.

Formulas

tax=rebate subtracted from bracket taxUIF=0.01×gross

Personal income tax sketch

Exam tricks you must know

These are the moves markers look for — not shortcuts that skip the method, but the habits that earn the method mark.

If the price already includes VAT, divide by 1.15 — do not subtract 15%
How:Total = price × 1.15 when VAT is still to be added. When the till already shows VAT, price excluding = total1.15. Subtracting 15% of the total is a different number and loses the mark.
When to use it:Till slips, VAT, and SARS-style tax questions.
Fencing is perimeter. Grass, paint and tiles are area. Tanks are volume.
How:Underline the object: wire, border, fence → add the sides. Floor, wall, field, paint → multiply length by width, then divide by coverage and round tins up. Water in a tank → m³ then × 1 000 for litres.
When to use it:Measurement papers: school fields, paint, Jojo tanks.
Always substitute the usage into both tariff options — the cheaper one can swap after break-even
How:Write cost A and cost B as two lines. Set them equal if they ask where the deals match. Circle the smaller total at the given usage. A graph with two lines makes the swap obvious.
When to use it:Cellphone contracts, prepaid electricity, and cake-sale break-even.

Step 1 / 5

Percent of gross

UIF is 1% of gross, not of take-home.

SARS income tax table with a worked PAYE calculation — Diagram

0.01×8000=80

Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.

More worked examples

Board walkthroughs on this topic. Open one, copy the working, then try the next.

Example 1 / 20

A kettle is marked R345, including 15% VAT. Find the price excluding VAT, and the VAT amount.

4. Step-by-step working

01
Write the formula
A price that includes 15% VAT is 1.15 times the price before VAT.
inclusive=1.15×exclusive
02
Multiply
Try R300. 1.15 × 300 = 300 + 45 = 345. That matches the tag, so the price before VAT is R300.
1.15×300=345
03
Subtract
VAT=345−300=R45.
345−300=45

How we got there

Read this like a teacher at the board. We go slowly, name every number, and say why we take each step.

Explain in another language · 11

1. What is the question asking?

Read the question twice. Circle the unknown. Underline every number and unit. The paper is asking: A kettle is marked R345, including 15% VAT. Find the price excluding VAT, and the VAT amount.

In other words — as if you have never seen this before

If you have never seen this before: An inclusive price is 115% of the exclusive price. Divide by 1.15. VAT is the difference, not 15% of R345. We will name a method in words, write the formula with no numbers, then substitute one line at a time.

2. What do we already know?

Inclusive price R345. VAT rate 15%.

3. Which method — and why this one?

An inclusive price is 115% of the exclusive price. Divide by 1.15. VAT is the difference, not 15% of R345.

4. Step-by-step working

01 / 06
Write the formula
A price that includes 15% VAT is 1.15 times the price before VAT.
inclusive=1.15×exclusive
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
02 / 06
Multiply
Try R300. 1.15 × 300 = 300 + 45 = 345. That matches the tag, so the price before VAT is R300.
1.15×300=345
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
03 / 06
Subtract
VAT=345−300=R45.
345−300=45
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
04 / 06
Sense-check
15% of 300: 10% is 30 and 5% is 15, so 30 + 15 = 45. Not 15% of 345.
0.15×300=45
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
05 / 06
Step F — Box the answer with its unit
Price excluding VAT: R300. VAT: R45.
Why this step: A number without a unit is half a mark on a Physics paper, and a marker can miss a Maths answer that is buried in working.
06 / 06
Step H — What the marker is looking for
On an NSC memo you usually earn: (1) a method mark for naming the right formula or idea in words, (2) an accuracy mark for substituting the given numbers with units, (3) an accuracy mark for the boxed answer with its unit. Write those three lines even if you are unsure of the arithmetic — blank pages score zero.
Why this step: First-timers chase the final number and leave the method blank. The memo still pays out for the idea and the substitution even when the last line is wrong.

5. The answer

Price excluding VAT: R300. VAT: R45.

Copy onto your answer sheet — in this order

Formula: inclusive = 1.15 × exclusive

Answer: Price excluding VAT: R300. VAT: R45.

6. Check it like a marker

Dividing by 1.15 is required when the tag already includes VAT. Adding 15% again would tax the tax.

7. A trap first-timers fall into

First-timers often grab the first formula they remember, mix units (cm with m, minutes with seconds), or drop a minus sign. Write the formula in words first: “this equals that, because…”

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