Practice questions 28.3


1. Mike earns €20 000 per year and must pay 18% income tax. (i) What is his gross pay per year? (ii) How much is Mike’s gross tax per year?


2. Stephen earns €700 per week and must pay 21% income tax. (i) What is Stephen’s gross salary per year? (ii) How much gross income tax must Stephen pay per year?


3. Sophie is a mechanic and earns €650 per week. She must pay 22% income tax on her gross earnings. She has a tax credit of €57.75 per week.


(i) How much gross income tax must Sophie pay? (ii) How much net income tax must she pay? (iii) What is her net wage per week?


4. Jobs are usually advertised with a gross annual salary. If a person must pay tax at 23%, use the information below to work out what gross tax is due for each salary, and the net annual salary. Remember, money is generally calculated to two decimal places.


Employment Gross pay (per year)


Private bus driver €31 000 Restaurant server €24 000 Delivery person Tour guide Dog walker


Sales executive


€19 000 €15 000 €12 000 €29 500


5. Harry earns €8 000 per year. He pays tax at a rate of 21%, and he has a tax credit of €1 700 per annum.


(i) Calculate how much gross tax Harry will have to pay per year.


(ii) How much tax does Harry actually have to pay? Justify your answer.


6. Sandy works in a local DIY store. She earns €9⋅50 per hour and works 38 hours per week.


(i) How much does Sandy earn in: (a) a week? (b) a month? (c) a year?


(ii) Sandy must pay tax at 22% on her gross salary. How much gross tax does Sandy pay in:


(a) a week? (b) a month? (c) a year?


(iii) Sandy has a tax credit of €67⋅50 per week. What is Sandy’s take home pay each week?


Gross tax due at 23%


Tax credit Net tax due Net pay (per year)


€1 650 €1 700 €1 600 €1 450 €1 100 €1 750


7. Diane earns €35 600 per year. She pays tax at 21⋅5% and has a tax credit of €1 700. Diane also pays €1 100 for health insurance per year, and €170 for bin charges per year.


(i) Calculate Diane’s gross tax per year. (ii) Calculate her net tax per year.


(iii) Calculate her net salary for a year after all deductions have been made.


8. Dillon is a fi tness trainer. He earns €19 500 per annum, plus a yearly bonus of €3 500 for every 10 clients he signs up to the gym. Dillon pays tax on all income earned at a rate of 22%, and has a tax credit of €1 850 per year. Last year, Dillon signed 20 people up to join the gym.


(i) What was Dillon’s gross pay last year? (ii) What was Dillon’s gross tax bill last year? (iii) How much was his net pay last year?


Section C Applying our skills 453


28 Money matters 2


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