Question

5. Say the following are deductions on a typical income, i. Pension deductions are 5% ii. Emploment Insurance deductions are 2.4% iii. And Income Tax deductions are as follows 1. For annual salaries, on the first $11,000, no income tax is paid, 2. On the first $11,000 to $25,000, 8% of the income is deducted, 3. On the first $25,000 to $50,000, 12% of the income is deducted, 4. On the first $50,000 to $100,000, 15% of the income is deducted, 5. And on the rest of the income, 20% of that income is deducted. Henry makes an annual gross salary of $70,000, what is his net salary?

Answer 1

$57,700

Explanation:

The deductions are ...

for pension and employment insurance, (5+2.4)% of $70,000

= 0.074 × $70,000 = $5,180

for income tax, ...

8% of the 14,000 between $11,000 and $25,000 = $1,120

12% of the 25,000 between $25,000 and $50,000 = $3,000

15% of the 20,000 between $50,000 and $70,000 = $3,000

Then the total of deductions is ...

$5,180 +1,120 +3,000 +3,000 = $12,300

Net salary after these deductions is ...

$70,000 -12,300 = $57,700