From the following figures calculate the net pay of Hazel Dunne - Leaving Cert Business - Question 10 - 2010
Question 10
From the following figures calculate the net pay of Hazel Dunne.
Gross Pay €50,000, Tax Credits €6,000
Standard Tax Rate 20%
Higher Tax Rate 41%
Cut-off Point €36,40... show full transcript
Worked Solution & Example Answer:From the following figures calculate the net pay of Hazel Dunne - Leaving Cert Business - Question 10 - 2010
Step 1
Calculate Gross Tax at Standard Rate
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Answer
For the income up to the cut-off point of €36,400, apply the standard tax rate of 20%:
36,400imes0.20=7,280
Step 2
Calculate Gross Tax at Higher Rate
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Answer
For income above the cut-off point, which is calculated as:
50,000−36,400=13,600
Then, apply the higher tax rate of 41%:
13,600imes0.41=5,576
Step 3
Calculate Total Gross Tax
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Answer
Now, add both taxes together:
7,280+5,576=12,856
Step 4
Calculate Tax Payable
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Answer
Subtract the tax credits from the gross tax:
12,856−6,000=6,856
Step 5
Calculate Net Pay
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Finally, subtract the tax payable from the gross pay:
50,000−6,856=43,144
Step 6
State two tax credits a person may be entitled to.
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Answer
Personal Tax credit (single, married, widowed)
PAYE Tax credit
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