John is a PAYE employee. He is single, and these are his tax credits and rate band for 2023:
Tax credits and rate bands
Description
|
Value |
Single Person’s Tax Credit |
€1,775
|
PAYE Tax Credit |
€1,775
|
Total tax credits |
€3,550 per year (€68.27 per week)
|
Rate band |
€40,000 per year (€769.23 per week)
|
John was given a tax credit certificate 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 2023
Description |
Income | Tax | Explanation |
Taxed at 20% |
€600 |
€120.00 |
Apply the standard rate of 20% up to the limit of the rate band
(€769.23) on the RPN
|
Taxed at 40% |
€0 |
€0 |
As John’s income (€600) is less than his rate band (€769.23), 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 amount of tax at the higher rate (if any) |
Less tax credits |
|
€68.27 |
Take away the tax credits as shown on the Tax Credit Certificate |
Tax payable |
|
€51.73 |
Gross tax less tax credits. |
John's weekly tax calculation for pay day 21 January 2023
Description |
Income | Tax | Explanation |
Taxed at 20% |
€600 |
€120.00 |
Apply the standard rate of 20% up to the limit of the rate band (€769.23) on the RPN |
Taxed at 40% |
€0 |
€0 |
As John’s income (€600) is less than his rate band (€769.23), 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 amount of tax at the higher rate (if any) |
Less tax credits |
|
€68.27 |
Take away the tax credits as shown on the Tax Credit Certificate |
Tax payable |
|
€51.73 |
Gross tax less tax credits. |