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Grade 10 Acc: Salary Scales explained

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This is a practical example and activity concerning Salary scales that businesses use for employees annually. It is an accounting concept that is a must know for young accountant learners. Very easy to understand

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THE BASICS: SALARY SCALE EXPLAINED.
87000 x 10470 – 118410 x 17930 – 172200 x 20800 – 213800
 87000 is the STARTING SALARY, the salary the employee
receives in the first year of employment.
 10470 is the amount that the starting salary is increased by
until it reaches 118410, this is the annual increment/raise.
 118410 is called the first notch, after it is reached, 118410 is
now increased by 17930 until it reaches 172200.
 Second notch is reached, 172200.
 177220 is again increased by the annual increase of 20800 until
it reaches 213800
 213800 is the top of the salary scale.
A table can be drawn up to show how the salary scale looks like.
Year Increment per Salary per Salary per
annum annum month
YEAR 1 - 87000 (÷12) 7250
YEAR 2 10470 97470 (÷12) 8122,50
YEAR 3 10470 107940 8995
YEAR 4 10470 118410 9867,50
YEAR 5 17930 136340 11361,67
YEAR 6 17930 154270 12855,83
YEAR 7 17930 172200 14350
YEAR 8 20800 193000 16083,33
YEAR 9 20800 213800 17816,67


ACTIVITY
Use the salary scale to make a table.
84000 x 3000 – 93000 x 4000 – 105000.

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