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Answering Questions Simplified Revision Notes

Revision notes with simplified explanations to understand Answering Questions quickly and effectively.

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Answering Questions

Example

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Paul has a gross salary of €52,000 per year. Calculate his gross income tax per year if the first €33,800 is taxed at 20% and the remainder is taxed at 40%.

First 33,800 taxed at 20% :

0.2(33800)=67600.2(33800)=6760

Difference taxed at 40% :

5200033800=1820052000-33800=182000.4(18200)=72800.4(18200)=7280

Gross income tax :

6760+7280=140406760+7280=14040

He is given tax credits worth 3300€3300, find his net income tax.


140403300=1074014040-3300=10740

Example

infoNote

Eimear earns a gross wage of 40000€40000 per annum with her job. She pays income tax at a rate of 20%20 \% on income up to the standard rate cut-off point of 35300€35300. She pays tax at a rate of 40%40 \% on the remainder. She has annual tax credits of 1650€1650. Find how much income tax she pays per annum.

First €35300 taxed at 20% :

0.2(35300)=70600.2(35300 )=7060

Difference taxed at 40% :

4000035300=470040000-35300=47000.4(4700)=18800.4(4700)=1880

Gross income tax :

7060+1880=89407060 +1880=8940

Tax credits :

89401650=72908940-1650=7290

net tax : 7290€7290

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