Daniel Mc Ardle is single and in employment. He is entitled to an annual tax credit of €1,650 and an employee tax credit of €1,650. This means that €3,300 (€1,650 + €1,650) will be deducted from the total yearly income tax that Daniel owes.
Tax payable = total income tax – tax credit Example
Susan Greene has a weekly gross pay of €650 and pays income tax (PAYE) at 20%. Her weekly tax credit is €40. Susan’s weekly net pay is calculated as follows:
Gross pay
PAYE 20% = 20% × 650 Less weekly tax credit Tax payable Net pay
€130.00 €40.00
€90.00 €560.00 Calculating tax payable and net pay A
Go to page 11 of your Activities and Accounts Book to practise calculating tax payable and net pay.
PAYSLIPS
Employees receive a payslip as a record of their pay. It is received weekly, fortnightly or monthly, depending on when they are paid. A payslip is a record of an employee’s pay.
i
A payslip shows an employee’s: • Gross pay
• Total deductions • Net pay.
Payslips can be given to employees as a paper copy or as an electronic copy, which is more environmentally friendly and can save a business money.
Below is a sample weekly payslip for employee Carole Lawler. EMPLOYEE: Carole Lawler
