Question

Income tax is deducted at the rate of 20% on the first €35 300 and 40% on the balance.(a) Joan has a gross annual income of €65 000. She has annual tax credits of €3545.Work out Joan's net income tax payable for the year.(b) work out Joan’s net pay for the year.

Answer 1

Given:

Income tax deducted by 20% on the first 35300

Above the balance is 40%

Find:Total income tax

Sol:.

(a)

First 35300 rate is 20% then amount is:

`\begin{gathered} =(20)/(100)*35300 \\ =7060 \end{gathered}`

40% above the 35300 then:

`\begin{gathered} =65000-35300 \\ =29700 \end{gathered}`

Tax is 40% of 29700

`\begin{gathered} =(40)/(100)*29700 \\ =11880 \end{gathered}`

So total tax is:

`\begin{gathered} =11880+7060 \\ =18940 \end{gathered}`

So net income tax for this year is 18940.

(b)

After credits 3534 then net pay for the year is:

`\begin{gathered} =18940-3534 \\ =15406 \end{gathered}`

Net pay for the year is 15406