Final answer:
To calculate the taxable income and income tax for the worker, one must subtract the tax-free allowance from the net income to determine the taxable income and then apply the tax rate to this amount. The worker's taxable income is GH¢16,000.00 and the income tax he pays is GH¢3,200.00.
Step-by-step explanation:
To calculate the taxable income and income tax of a worker in Ghana, we first need to understand the basic concepts of taxation such as deductions, exemptions, and tax rates. Once these are clear, we can proceed to the calculations.
Calculating Taxable Income
The worker is given a tax-free allowance of GH¢5,000.00. Since his net income is GH¢21,000.00, the remainder after the allowance is what becomes taxable. To find the taxable income, we subtract the tax-free allowance from the net income:
Taxable income = Net income - Tax-free allowance
Taxable income = GH¢21,000.00 - GH¢5,000.00
Taxable income = GH¢16,000.00
Calculating Income Tax
Next, to calculate the income tax, we use the tax rate given, which is 20 pesewas per Ghana cedi on the taxable income:
Income tax = Taxable income × Tax rate
Income tax = GH¢16,000.00 × 0.2 (since 20 pesewas is 0.2 GH¢)
Income tax = GH¢3,200.00
Therefore, the worker's taxable income is GH¢16,000.00 and the income tax he pays is GH¢3,200.00.