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Explain the term PAYE - Leaving Cert Home Economics - Question 10 - 2014
Question 10
Explain the term PAYE. Give two examples of how PAYE contributions are used by the government. (i) (ii)
Worked Solution & Example Answer:Explain the term PAYE - Leaving Cert Home Economics - Question 10 - 2014
Step 1
Explain the term PAYE.
Answer
PAYE stands for 'Pay As You Earn.' It is a taxation system where a compulsory deduction is made from an employee's salary and paid directly to the Revenue Commissioners, who represent the Government. This method ensures that income tax is collected at the source, meaning that the amount deducted depends on the individual's income level. This system not only streamlines the tax collection process but also helps individuals manage their tax liability throughout the year.
Step 2
Give two examples of how PAYE contributions are used by the government.
Answer
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Capital expenditure: PAYE contributions provide funds to pay public servants such as teachers, nurses, and guards. This is essential for maintaining educational institutions and healthcare facilities.
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Constructing and maintaining road networks: PAYE contributions are also utilized for infrastructure development, which includes transport, communication, and cultural heritage, ensuring a robust public service and connectivity.