Look intoLook into

Article No:14Article No:14

Tax Rates for Income TaxesTax Rates for Income Taxes

Case Studies Case Studies

Case (1)Case (1):: Omar work in private company with monthly Omar work in private company with monthly salary 2000 NISsalary 2000 NIS..

11 - -Calculate the tax income if you know that Calculate the tax income if you know that he is married and has 2 sons under 18 he is married and has 2 sons under 18 years oldyears old..

22 - -Calculate the tax value per month in Calculate the tax value per month in (NIS)(NIS)..

33 - -Calculate his monthly salary after income Calculate his monthly salary after income taxtax..

Note: The exchange rate for dollar 4 NISNote: The exchange rate for dollar 4 NIS..

AnswerAnswer::

- -Annual incomeAnnual income = 2000 * 12= 24000 = 2000 * 12= 24000 24000/424000/4 = = 60006000$$

- -Exemptions:Exemptions: (article 10)(article 10)

Resident = 3000Resident = 3000 Wife = 500Wife = 500

Sons =500*2 = 1000Sons =500*2 = 1000 Total =Total =45004500$$

- -Taxable incomeTaxable income= 6000-4500== 6000-4500=15001500$$ - -Income TaxIncome Tax = 1500* 8%= = 1500* 8%= 120120$ annually $ annually

(article 14)(article 14)

- -Tax value per monthTax value per month = 120$/ 12 = = 120$/ 12 =1010$$10$10$**44 = = 4040 NISNIS

- -Salary after income taxSalary after income tax= = 19601960 NIS NIS

Case (2)Case (2):: Hassan work in private company with Hassan work in private company with monthly salary 3000 NISmonthly salary 3000 NIS..

- - He lives in a rent home 200$ He lives in a rent home 200$ monthlymonthly..

- - He is married and have 5 sonsHe is married and have 5 sons..

RequiredRequired::

11--Calculate the accrued income tax if you Calculate the accrued income tax if you know that the exchange rate for dollar 4 know that the exchange rate for dollar 4 NISNIS..

22 - -Calculate the tax value per monthCalculate the tax value per month..

33 - -Calculate his monthly salary after income Calculate his monthly salary after income taxtax..

AnswerAnswer::

- -Annual incomeAnnual income = 3000*12/4= = 3000*12/4= 90009000$$

- -ExemptionsExemptions : :

- - Resident = 3000Resident = 3000

- - Wife = 500Wife = 500

- - Sons =500*5=2500Sons =500*5=2500

- - Rent = 2000Rent = 2000

Total of exemptions = Total of exemptions = 80008000$ $

Taxable incomeTaxable income =1000* 8% = =1000* 8% = 80$80$ annually annually

Tax value per monthTax value per month = 80$/ 12 =6.66$ = 80$/ 12 =6.66$

6.66$6.66$**44 = = 26.626.6 NISNIS

Salary after income tax= Salary after income tax= 2973.4 NIS2973.4 NIS

Case (3)Case (3):: Mr. Marwan work as manager for a company Mr. Marwan work as manager for a company withwith::

- -monthly salary 9000 NIS and hasmonthly salary 9000 NIS and has, , - -bonus addition career 1500bonus addition career 1500,,

- -bonus addition high cost of living 750 andbonus addition high cost of living 750 and,, - -bonus addition for travel 250bonus addition for travel 250..

RequiredRequired:: 11 . .Calculate the income tax if you know that Calculate the income tax if you know that

he is married and have 2 sons. One he is married and have 2 sons. One of them study in Palestine universityof them study in Palestine university..NoteNote::

- - The exchange rate for dollar 5 NISThe exchange rate for dollar 5 NIS.. - - Marwan work in private company so bonus Marwan work in private company so bonus

for travel included with income taxfor travel included with income tax..

AnswerAnswer::

Base salary 9000Base salary 9000

Bonus addition career 1500Bonus addition career 1500

bonus addition high cost of living 750bonus addition high cost of living 750

bonus addition for travel 250bonus addition for travel 250

Total salary 11500 *12/5= 27600$Total salary 11500 *12/5= 27600$

ExemptionExemption::

Resident 3000Resident 3000

Wife 500Wife 500

Sons 500= 500*1Sons 500= 500*1

Student (university) 2500Student (university) 2500

Total of exemption = 6500$Total of exemption = 6500$

Taxable income 27600- 6500= 21100$Taxable income 27600- 6500= 21100$1000010000**8%8% = =80080060006000**12%12%==72072051005100**16%16% = =816816

Annual income tax = 800+720+816=2336Annual income tax = 800+720+816=2336Monthly income tax= 2336/12=194.6$Monthly income tax= 2336/12=194.6$

194.6194.6**55==973NIS973NISSalary after income tax = 11500-973=10527 Salary after income tax = 11500-973=10527 NISNIS

Case (4)Case (4):: Mr. Jehad work in the Investment Bank with Mr. Jehad work in the Investment Bank with monthly monthly base salarybase salary 309$ and bonus of 309$ and bonus of addition high cost of living amounted 80% addition high cost of living amounted 80% of base salary. and bonus addition for cash of base salary. and bonus addition for cash risk 25.7$ monthlyrisk 25.7$ monthly..

If you know that his contribution of saving If you know that his contribution of saving box with 5% of base salary. And social box with 5% of base salary. And social security contribution (pension) 32.02$. Mr. security contribution (pension) 32.02$. Mr. Jehad get 14 salaries yearly (banking Jehad get 14 salaries yearly (banking system)system)Required: calculate the income tax in caseRequired: calculate the income tax in case

11 - -singlesingle..22( -( -married + 4married + 4 ) )and additional income from part and additional income from part

time work 200$ for 6 months annuallytime work 200$ for 6 months annually..

Look intoLook into

Article No:6 & 7Article No:6 & 7

Answer: case 1Answer: case 1

Base salary 309$Base salary 309$

+ +addition high cost of living 247.2$ (309*80%)addition high cost of living 247.2$ (309*80%)

+ +addition for cash risk 25.7$addition for cash risk 25.7$

total monthly salary = 581.9$total monthly salary = 581.9$

Deduct nontaxable incomeDeduct nontaxable income

saving box 15.45$saving box 15.45$

social security contribution (pension) 32.02$social security contribution (pension) 32.02$

Total of nontaxable income = 47.47Total of nontaxable income = 47.47

Net income = 534.43Net income = 534.43

Annual net income =534.43*14= 7482.02$Annual net income =534.43*14= 7482.02$

Deduct the exemptionDeduct the exemption

Resident 3000Resident 3000

Net taxable income 4482.02*8% = 358.56$Net taxable income 4482.02*8% = 358.56$

Monthly income tax 358.56 / 12 = 29.88$Monthly income tax 358.56 / 12 = 29.88$

Answer: case 2Answer: case 2Base salary 309$Base salary 309$

+ +addition high cost of living 247.2$ (309*80%)addition high cost of living 247.2$ (309*80%) + +addition for cash risk 25.7$addition for cash risk 25.7$

total monthly salary = 581.9$total monthly salary = 581.9$Deduct nontaxable incomeDeduct nontaxable incomesaving box 15.45$saving box 15.45$social security contribution (pension) 32.02$social security contribution (pension) 32.02$Total of nontaxable income = 47.47Total of nontaxable income = 47.47Net income = 534.43Net income = 534.43Annual net income =534.43*14= 7482.02$ + Annual net income =534.43*14= 7482.02$ + ( 200$*6)=8682.02( 200$*6)=8682.02Deduct the exemptionDeduct the exemptionResident 3000Resident 3000Wife 500Wife 500Sons 2000 (500*4)Sons 2000 (500*4)Net taxable income 3182.02*8% = 254.56$Net taxable income 3182.02*8% = 254.56$

Monthly income tax 254.56 / 12 = 21.21$Monthly income tax 254.56 / 12 = 21.21$