To calculate Faiz's net pay, we need to consider income tax and national insurance deductions. In the UK, income tax is typically divided into different tax brackets with different rates. As of my last knowledge update in January 2022, the UK tax brackets were as follows:
1. **Personal Allowance:** No tax on income up to £12,570.
2. **Basic Rate:** 20% on income between £12,571 and £50,270.
3. **Higher Rate:** 40% on income between £50,271 and £150,000.
For the sake of simplicity, let's assume Faiz's income falls into the Basic Rate.
### Income Tax Calculation:
1. **Calculate Taxable Income:**
\[ Taxable Income = Annual Salary - Personal Allowance \]
\[ Taxable Income = £840,000 - £12,570 = £827,430 \]
2. **Calculate Income Tax:**
\[ Income Tax = Taxable Income \times Tax Rate \]
\[ Income Tax = £827,430 \times 0.2 \]
\[ Income Tax = £165,486 \]
### National Insurance:
National Insurance (NI) contributions depend on the earnings and the NI category. Assuming Faiz is an employee:
1. **Primary Class 1 National Insurance:**
\[ NI = Earnings \times NI Rate \]
\[ NI = £840,000 \times 0.12 \]
\[ NI = £100,800 \]
### Net Pay Calculation:
\[ Net Pay = Annual Salary - Income Tax - National Insurance \]
\[ Net Pay = £840,000 - £165,486 - £100,800 \]
\[ Net Pay = £573,714 \]
### Monthly Net Pay:
\[ Monthly Net Pay = Net Pay / 12 \]
\[ Monthly Net Pay = £573,714 / 12 \]
\[ Monthly Net Pay ≈ £47,809.50 \]
Please note that tax laws may change, and it's always advisable to consult with a financial professional for the most accurate and up-to-date information.Answer:
Explanation: