Megan is checking her tax bill for the last year. The tax rates were as follows; -no tax on the first £11 000 of earnings

Question
Answer:
Given that Megan's tax rates were as follows:
No tax one the first £11000 of earnings
Earnings in excess of £11000 and up to £43000 taxed at a rate of 20%
Earning in excess of 43000 and up to £150000 taxed at a rate of 40%
Earnings over £150000 taxed at a rate of 45% 
If Megan earned £158900 before tax last year, the amount of tax she paid in total is given as follows:
First £11000 = £0 tax
Balance after first £11000 = £158900 - £11000 = £147900

Next (£43000 - £11000 = £32000) = 20% of £32000 = 0.2 x £32000 = £6400 tax
Balance after next £32000 = £147900 - £32000 = £115000

Next (£150000 - £43000 = £107000) = 40% of £107000 = 0.4 x £107000 = £42800 tax
Balance after next £107000 = £115000 - £107000 = £8000

Remaiming £8000 = 45% of £8000 = 0.45 x £8000 = £3600 tax

Total tax = £6400 + £42800 + £3600 = £52800

Therefore, she paid a total of £52800 in tax last year.
solved
general 4 months ago 2674