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Read the information supplied and answer the questions which follow - Leaving Cert Business - Question C - 2018
Question C
Read the information supplied and answer the questions which follow. Ben Caffrey is a manager at Fun-Go Holidays Ltd and earns a gross annual salary of €55,000. His... show full transcript
Worked Solution & Example Answer:Read the information supplied and answer the questions which follow - Leaving Cert Business - Question C - 2018
Step 1
The PAYE which Ben has to pay
Answer
To calculate PAYE:
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Determine Taxable Income:
Taxable Income = Gross Salary - Voucher = €55,000 - €5,000 = €60,000
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Calculate PAYE:
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For the first €34,550: 20%
PAYE on €34,550 = €34,550 × 0.20 = €6,910
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For the remaining income (€60,000 - €34,550 = €25,450): 40%
PAYE on €25,450 = €25,450 × 0.40 = €10,180
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Total PAYE before tax credits:
Total PAYE = €6,910 + €10,180 = €17,090
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Subtract Tax Credits:
Total Tax Credits = €1,650 (PAYE) + €1,650 (Single Person) + €70 (Dependent Relative) = €3,370
- PAYE after credits:
PAYE Ben has to pay = Total PAYE - Total Tax Credits = €17,090 - €3,370 = €13,720
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Step 2
Step 3
The total amount of USC
Answer
To calculate USC:
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Calculate USC on different income bands:
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0.5% on the first €12,012:
USC on €12,012 = €12,012 × 0.005 = €60.06
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2% on the next €7,360:
USC on €7,360 = €7,360 × 0.02 = €147.20
- 4.75% on the remainder (€60,000 - €12,012 - €7,360 = €40,628):
USC on €40,628 = €40,628 × 0.0475 = €1,929.83
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Total USC:
Total USC = €60.06 + €147.20 + €1,929.83 = €2,137.09
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Step 4
Ben's net annual take-home pay
Answer
Ben’s net annual take-home pay is calculated as follows:
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Starting from his Taxable Income:
Gross Pay = €60,000
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Subtract PAYE and USC and PRSI:
Total Deductions: = PAYE + USC + PRSI = €13,720 + €2,137.09 + €2,400 = €18,257.09
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Net Annual Take Home Pay:
Net Annual Take Home Pay = Gross Pay - Total Deductions = €60,000 - €18,257.09 = €41,742.91