Reference no: EM132465952

Skye has worked at JBJ Inc. in Toronto for 11 years. Her annual salary is $90,000, on which CPP, EI and income tax are withheld at source. JBJ Inc. supplies all employees with monthly transit passes to encourage greener transportation to and from the workplace, which costs the company $85/month per employee. Skye also receives an allowance of $300/month to cover travel to and from Ottawa to meet with several of her clients. She travels one weekend per month and if she tried, she could make the $300 cover all costs if she really skimped (i.e. if she took the bus, stayed at a hotel in the outskirts of the city away from the clients, and ate at fast food restaurants). Instead, she will often fly or take the train since they are faster and get her home to her family quicker, she tends to stay at hotels closer to her clients' premises, and she prefers to eat healthy, wholesome meals. Unfortunately, in late September, Skye fell ill and had to be hospitalized for a few weeks, and then was on bed rest at home for the rest of the year. Because she had to go on leave from October 1 onwards, her salary (and related deductions) ceased, as did her other benefits (transit, allowance). Luckily, she was part of a decent group sickness insurance plan that JBJ Inc. had provided as one of her employment benefits. Over the term of her employment with them, JBJ had paid $7,000 in premiums for her towards this plan, including $400 so far in the current year. Once on leave, Skye started receiving payouts from the plan, which totaled $3,750/month. During this period, she also received some physical and mental health counselling to help her cope with the illness, which was covered by JBJ Inc. at a cost of $2,800. Before her leave, she had received $67,500 of her salary, on which CPP, EI and income tax of $2,749, $860 and $18,000 were withheld respectively. Her travelling expenses to and from Ottawa amounted to $6,910 (of which $1,800 was for meals).

Required:

a) Calculate Skye's net employment income for the year.

b) Briefly explain why any dollar amount presented above has been omitted from your calculations. In doing so, please explain if the omitted amount would appear elsewhere in the tax calculation.