John is a PAYE employee. He is single, and the following are his tax credits and rate band for 2024:
Tax credits and rate band
Description
|
Value |
Single Person’s Tax Credit |
€1,875
|
PAYE Tax Credit |
€1,875
|
Total tax credits |
€3,750 per year (€72.12 per week)
|
Rate band |
€42,000 per year (€807.70 per week)
|
John was given a TCC showing these tax credits and rate band and showing that Week 1 basis applies. A Revenue Payroll Notification (RPN) was made available to his employer with the total amounts.
John earns €600 per week. This is how his weekly tax is calculated:
John's weekly tax calculation for pay day 14 January 2024
Description |
Income | Tax | Explanation |
Taxed at 20% |
€600 |
€120.00 |
Apply the standard rate of 20% up to the limit of the rateband
(€807.70) on the RPN
|
Taxed at 40% |
€0 |
€0 |
As John’s income (€600) is less than his rate band (€807.70), he does not pay tax at the higher rate of 40% this week |
Gross tax |
|
€120.00 |
Add the amount of tax at the standard rate to the amountof tax at the higher rate (if any) |
Less tax credits |
|
€72.12 |
Take away the tax credits as shown on the Tax Credit Certificate |
Tax payable |
|
€47.88 |
Gross tax less tax credits. |
John's weekly tax calculation for pay day 21 January 2024
Description |
Income | Tax | Explanation |
Taxed at 20% |
€600 |
€120.00 |
Apply the standard rate of 20% up to the limit of the rateband (€807.70) on the RPN |
Taxed at 40% |
€0 |
€0 |
As John’s income (€600) is less than his rate band(€807.70), he does not pay tax at the higher rate of 40% this week |
Gross tax |
|
€120.00 |
Add the amount of tax at the standard rate to the amountof tax at the higher rate (if any) |
Less tax credits |
|
€72.12 |
Take away the tax credits as shown on the Tax Credit Certificate |
Tax payable |
|
€47.88 |
Gross tax less tax credits. |