GB-43-03-001 · Modelled income tax
In a simplified tax model, the first £16000 of annual income is tax-free. The rest is taxed at 22%. There are no other deductions. A worker earns £37000.
(a) Calculate the annual tax.
(b) Calculate annual take-home pay.
Part (a)
Financial Maths: Income Tax & Take-Home Pay
Application of related method — Booklet p. 51
Method
1) Taxable income = Salary − Tax-free allowance
2) Tax = Taxable income × (rate /
1
0
0)
3) Take-home pay = Salary − Tax
Worked Example (GB-43-03-001 · Part (a))
Calculate the annual tax.
1)
Taxable income £21000.
2)
£4620.00
Ans =
£4620.00
Part (b)
Financial Maths: Income Tax & Take-Home Pay
Application of related method — Booklet p. 51
Method
1) Taxable income = Salary − Tax-free allowance
2) Tax = Taxable income × (rate /
1
0
0)
3) Take-home pay = Salary − Tax
Worked Example (GB-43-03-001 · Part (b))
Calculate annual take-home pay.
1)
£32380.00
Ans =
£32380.00