Tax brackets are the divisions at which tax rates change in a progressive tax system (or an explicitly regressive tax system, although this is much rarer). Essentially, they are the cutoff values for taxable income -- income past a certain point will be taxed at a higher rate.
Video Tax bracket
Example
Imagine that there are three tax brackets: 10%, 20%, and 30%. The 10% rate applies to income from $1 to $10,000; the 20% rate applies to income from $10,001 to $20,000; and the 30% rate applies to all income above $20,000.
Under this system, someone earning $10,000 would be taxed at a rate of 10%, paying a total of $1,000. Someone earning $5,000 would pay $500, and so on.
Meanwhile, someone earning $25,000 would face a more complicated calculation. The rate on the first $10,000 would be 10%; the rate from $10,001 to $20,000 would be 20%; and the rate above that would be 30%. Thus, they would pay $1,000 for the first $10,000 of income (10%); $2,000 for the second $10,000 of income (20%); and $1,500 for the last $5,000 of income (30%); in total, they would pay $4,500, or an 18% average tax rate.
In practice the computation is simplified by using point-slope form or slope-intercept form of the linear equation for the tax on a specific bracket, either as tax on the bottom amount of the bracket plus the tax on the marginal amount within the bracket:
or the tax on the entire amount (at the marginal rate), minus the amount that this overstates tax on the bottom end of the bracket.
See Progressive tax#Computation for details.
Maps Tax bracket
Tax brackets in Australia
Individual income tax rates (residents)
Financial years 2010-11, 2011-12
The above rates do not include the Medicare levy of 2.0%.
Financial year 2012-13
The above rates do not include the Medicare levy of 2.0%
Tax brackets in Canada
Canada's federal government has the following tax brackets for the 2012 tax year (all in Canadian dollars). Note that the "basic personal amount" of $15,527 effectively means that income up to this amount is not subject to tax, although it is included in the calculation of taxable income.
Each province except Québec adds their own tax on top of the federal tax. Québec has a completely separate income tax.
Provincial / Territorial Tax Rates for 2012:
Tax brackets in India
Income tax slabs applicable for financial year 2015-16 (Assessment Year- 2016-17)is summarized below:
Tax brackets in Malta
Malta has the following tax brackets for income received during 2012
Single Rates:
Married Rates:
Tax brackets in the Netherlands
Tax brackets in New Zealand
New Zealand has the following income tax brackets (as of 1 October 2010). All values in New Zealand dollars, with the ACC Earners' levy not included.
- 10.5% up to $14,000
- 17.5% from $14,001 to $48,000
- 30% $48,001 to $70,000
- 33% over $70,000
- 45% when the employee does not complete a declaration form (IR330)
ACC Earners' Levy for the 2010 tax year is 2.0%, an increase from 1.7% in the 2008 tax year.
Tax brackets in Singapore
2007 & 2008
There will be a personal tax rebate of 20% granted for 2008, up to a maximum of $2,000.
2013
All figures are in Singapore dollars.
Tax brackets in South Africa
The Minister of Finance announced new tax rates for the 2012-2013 tax year. They are as follows :
Tax brackets for the 2012 year of assessment
Tax brackets for the 2013 year of assessment
Tax brackets in Switzerland
Personal income tax is progressive in nature. The total rate does not usually exceed 40%.
The Swiss Federal Tax Administration website [2] provides a broad outline of the Swiss tax system, and full details and tax tables are available in PDF documents.
The complexity of the system is partly because the Confederation, the 26 Cantons that make up the federation, and about 2 900 communes [municipalities] levy their own taxes based on the Federal Constitution and 26 Cantonal Constitutions.
Tax brackets in Taiwan
Income tax rates (Individual)
Financial year 2013
Tax brackets in the United Kingdom
Tax brackets in the United States
2018 tax brackets under current law
As of January 1, 2018, the tax brackets have been updated due to the passage of the Tax Cuts and Jobs Act:
Source of the article : Wikipedia
0 Comments