Question

Dana has to pay 25% tax on any income above £24,000 per year. Dana is paid £36,000 annually. Calculate the amount of money she receives after tax each month.

Answer 1

Answer:

£2,750

Step-by-step explanation:

Tax rule:  25% tax on any income above £24,000 per year

It means that upto  £24,000 there is no tax and the amount above  £24,000

is taxable.

Annual payment of Dana =  £36,000

Hence, she will be taxed only on amount above  £24,000 out of £36,000.

Lets find amount above  £24,000 =  £36,000- £24,000 =  £12,000

Tax on  £12,000 = 25% of  £12,000 = 25/100 *  £12,000 =  £3,000

Thus,  £3,000 will be deducted as tax annually out of total earning of  £36,000.

Amount paid to Dana after deduction of tax annually =  £36,000 -  £3,000

Amount paid to Dana after deduction of tax annually is £33,000

As one year has 12 months , hence it can be also said that in 12 months she is paid £33,000

the amount of money she receives after tax in 12 month =  £33,000

Dividing LHS and RHS by 12

The amount of money she receives after tax in 12/12 month =  £33,000/12

The amount of money she receives after tax in 1 month =  £2,750

The amount of money Dana receives after tax each month is £2,750.