ABC Ltd employs 5 staff. Each staff member is entitled to 20 days annual leave per annum. Leave loading of 17.5% is paid when the leave is taken. On 31 December 2016 Joan Rivers left the company and was paid out her untaken leave entitlements. Joan had 12 days leave owing at 1 July 2016 and took 4 days leave between 1 July and 31 December 2016. Her salary at the time of her departure was
$140 000.
There are 260 work days in a year. On 1 July each year all employees receive a 3% wage rise. There are no other wage rises given during the year.
The gross entitlement owing to Joan Rivers on 31 December 2016 was:

Question

Quizplus · Accepted Answer

First, we need to calculate the total number of days of annual leave entitlement for all staff members:

5 staff members x 20 days = 100 days

Next, we need to calculate the total leave loading for each staff member:

20 days x 17.5% = 3.5 days

The total number of leave days that Joan Rivers had accrued by 1 July 2016 is:

12 days

The total number of leave days that Joan Rivers took after 1 July 2016 is:

4 days

Therefore, the total number of leave days that Joan Rivers was entitled to on 31 December 2016 is:

12 days + 4 days = 16 days

We can now calculate the gross entitlement owing to Joan Rivers as follows:

16 days x (1 + 17.5%) = 18.8 days

Joan's daily rate of pay is:

$140,000 ÷ 260 work days = $538.46

The gross entitlement owing to Joan Rivers is:

18.8 days x $538.46 = $10,130.29

Therefore, the answer is D.

ABC Ltd Employs 5 Staff