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new tax system.paye.how it works?

  • 08-03-2003 1:01am
    #1
    madogwilliams
    Closed Accounts Posts: 2 ✭


    can someone please explain to somebody thats a bit wet
    around the ears, the new tax system.in simple form,not in a complicated way .
    i tried to get my head around it all, but putting it into practice,is giving me a headache!!!.please help?!:confused:


Comments

  • #2
    therecklessone
    Registered Users, Registered Users 2 Posts: 17,213 ✭✭✭✭therecklessone


    Ok, the basics...

    There are two tax rates, the standard rate, 20%, and the higher rate, 42%. If you earn over 28000 euro, you will pay 20% on the first 28000 euro, then 42% on the rest. Still with me?

    You are also entitled to certain tax credits, depending on your circumstances.

    To work out how much you pay, do the following...

    Work out 20% of 28000.
    Then work out 42% of your remaining salary, i.e yearly salary-28000 euro.
    Add the two figures, then subtract your yearly tax credits.
    This will give you the amount of tax to be paid for the year.

    Your income tax cert will include all the necessary information, including a weekly and monthly breakdown of tax credits/standard rate cut off point.

    That help?


  • #3
    Lafortezza
    Registered Users, Registered Users 2 Posts: 8,806 ✭✭✭Lafortezza


    ^^^ speaks the truth

    on a weekly basis, say you earn 600 euro a pop, your weekly cut-off will be 28000 / 52 = 538 euro

    so you pay 538 euro x 20% (the lower tax rate) = 107.60 tax

    then the remainder of your pay from 538 up to 600 is taxed at 42% -> 62 x 42% = 26.04

    so your total tax bill for the week = 26.04 + 107.60 = 133.64

    but then you have your tax credit (dependant on various things like if you are married etc) = 29.23 for a single person

    this is subtracted from your total weekly tax so
    133.64 - 29.23 = 104.41 is the final tax figure you should see on your payslip

    www.revenue.ie has load of FAQ and pdf files to look at


    and yes tax calculations give me an erection :o


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