Eleanor has a gross income of €38 500 for the year - Junior Cycle Mathematics - Question 3 - 2015

To determine Eleanor's net income, we need to calculate her gross tax based on her income above the standard rate cut-off point.

1. Calculate Income Subject to Tax:

   • Gross income: €38,500

   • Standard rate cut-off: €33,800

   • Income taxed at standard rate (20%):

     $$€33,800 imes 0.20 = €6,760$$

2. Calculate Income Subject to Higher Rate:

   • Income over standard cut-off:

     $$€38,500 - €33,800 = €4,700$$

   • Tax at higher rate (40%):

     $$€4,700 imes 0.40 = €1,880$$

3. Calculate Total Gross Tax:

   • Total Gross Tax:

     $$€6,760 + €1,880 = €8,640$$

4. Apply Tax Credit:

   • Annual Tax Credit: €3,300

   • Net Tax:

     $$€8,640 - €3,300 = €5,340$$

5. Calculate Net Income:

   • Net Income:

     $$€38,500 - €5,340 = €33,160$$