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Written Answers. - Tax Code.

Tuesday, 3 December 2002

Dáil Éireann Debate
Vol. 558 No. 4

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 205. Mr. P. McGrath Information on Paul McGrath Zoom on Paul McGrath  asked the Minister for Finance Information on Charlie McCreevy Zoom on Charlie McCreevy  the tax paid by a single income married couple with gross income of ?56,000 in 2002; if he will compare this amount to that paid by a double income married couple with each earning ?28,000 per annum, one earning ?37,000 and the other earning ?19,000, assuming in all cases no dependent children or other additional tax credits. [24820/02]

Minister for Finance (Mr. McCreevy): Information on Charlie McCreevy Zoom on Charlie McCreevy The position is that the tax rates and bands for a married couple for 2002 are as follows: Married couple, one spouse with income – first €37,000 @ 20%, balance @ 42%; married couple, both spouses with income – first €37,000 with increase of €19,000 maximum @ 20%, balance @ 42%.

In the case of married couples with two incomes the standard rate band available to one spouse will not be greater than that available to a one income married couple i.e. €37,000. The second spouse may avail of the balance of the €56,000 band.

The following six examples show the income tax payable by single and double income families as requested by the Deputy on a gross income of €56,000 for the current tax year. The examples refer to earners in the PAYE and self-employed sectors and are based on the assumption in each case that the married couple are jointly assessed for tax purposes.

Example 1

In this example it is assumed that the individual is in the PAYE system.

One Income Family with no dependent children

Gross Income €56,000
Band Available €37,000
Band Utilised €37,000
Tax €37,000 @ 20% = €7,400
€19,000 @ 42% = €7,980
Gross Tax Due €15,380
Less Tax Credits Personal Credit (€3,040)
Employee Credit (€660)
= Total Credits (€3,700)
Net Tax Due €11,680

[1052] Example 2

In this example it assumes that both spouses are working in the PAYE sector.

Two Income Family with no dependent children and income split between spouses €28,000: €28,000.

Joint Income €56,000
Spouses Income €28,000 €28,000
Band Available €28,000 €28,000
Band Utilised €28,000 €28,000
Tax liability €5,600 (€28,000 @20%) €5,600 (€28,000 @20%)
Gross Tax Due €11,200
Less Tax Credits
(€1,520) personal credit (€1,520)
(€660) employee credit (€660)
(€2,180) (€2,180)
= Total credits (€4,360)
Net Tax Due €6,840

Example 3

In this example it is assumed that both spouses are in the PAYE

system.

Two Income Family with no dependent children and income split between spouses €37,000: €19,000.

Joint Income €56,000
Spouses Income €37,000 €19,000
Band Available €37,000 €19,000
Band Utilised €37,000 €19,000
Tax Liability €7,400 (€37,000 @20%) €3,800 (€19,000 @20%)
Gross Tax Due €11,200
Less Tax Credits
(€1,520)personal credit (€1,520)
(€660)employee credit (€660)
= Total Credits (€4,360)
Net Tax Due €6,840

Example 4

In this example it is assumed that the earner is self-employed.

One Income Family with no dependent children.

Gross Income €56,000
Band Available €37,000
Band Utilised €37,000
Tax €37,000 @ 20% = €7,400
€19,000 @ 42% = €7,980
Gross Tax Due €15,380
Less Tax Credits Personal Credit (€3,040)
Net Tax Due €12,340

Example 5

In this example it assumes that each spouse is self employed.

Two Income Family with no dependent children and income split between spouses €28,000: €28,000.

Joint Income €56,000
Spouses Income €28,000 €28,000
Band Available €28,000 €28,000
Band Utilised €28,000 €28,000
Tax liability €5,600 (€28,000 @20%) €5,600 (€28,000 @20%)
Gross Tax Due €11,200
Less Tax Credits
(€1,520)personal credit (€1,520)
= total credits (€3,040)
Net Tax Due €8,160

[1053] Example 6

In this example it is assumed that both spouses are self-employed.

Two Income Family with no dependent children and income split between spouses €37,000:€19,000.

Joint Income €56,000
Spouses Income €37,000 €19,000
Band Available €37,000 €19,000
Band Utilised €37,000 €19,000
Tax Liability €7,400 (€37,000 @20%) €3,800 (€19,000 @20%)
Gross Tax Due €11,200
Less Tax Credits
(€1,520)personal credit (€1,520)
= Total Credits (€3,040)
Net Tax Due €8,160


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