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Income tax rates: can you earn more with a lower salary?

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  • Income tax rates: can you earn more with a lower salary?


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Answer #1 | 29/04 2008 12:29
No, It is a step function. A person making 50K will have 0+(50000-7664)*.15=6350, or takes home 43650. 55 will have 0+(52152-7665)*.15+(55000-52153)*.42=$7870 take home 44282.
Answer #2 | 29/04 2008 12:38
Each tax rate only applies to the amount that falls between the min and max for that range. For example, your tax on 50,000 is (0% of 7664) + (15% of 42,336) = 6350.40 and your tax on 55,000 is (0% of 7664) + (15% of 44,488) + (42%* of 2848) = 7869.36.

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