April 25, 2020
This is tax that is paid by a citizen on his Income. Since different people has different rates of earning, and at the same time the government would like to maintain equality in the country, then the tax is not levied at the same rate. It is a graduated rate of tax, where by those earning high pay high taxes than those who earn little. The definition of income is the total amount of income that a citizen gets at a certain time. This is including all the incomes that are changeable and deducting any income that is are as follows:
Schedule X – Single If taxable income is over this amount: But not over this amount: The tax is this:
Income range percentage
$0 to $7,550 – 10%
$7,550 to $30,650 $755 – 15%
$30,650 to $74,200 -25%
$74,200 to $154,800 -28%
$154,800 to $336,550 -33%
$336,550 and above -35%
For an Income of $ 98,000 I have used the attached Excel sheet to show my calculation of the tax payable which is $20651.5.
This is the amount that a person earning that amount as the total income will pay to the revenue authority. If a person is employed, then the national revenue authority places mandate to the employer to remit the tax payable to the revenue authority.
The tax rate on Social Security
This is calculates as a percentage of income that one derives. The standard rate is 6.2%, this rate ensures that those people who are earning high pay high. It ensures that equality and fairness is attained.
The tax rate on Medicare
This is a tax paid on the salary of a citizen to cater for medical expenses. It is a percentage of income of a citizen in our case it is 1.45%. The standard rate ensures that there is equality in the economy.
Get a price quote