Can anyone help me with this maths question

[richiwatts]

Our local tax office couldn't answer this question and was hoping you can:

To work out how much it would cost a company to pay someone in Sweden you calculate as follows:

net + 33% tax + 32.82% employers tax = total cost
£1000 + 33% tax + 32.82% employers tax = £3096.50 total cost

But the problem is how do you calculate that backwards?

If the company can pay £4000 how would you get the amount for:
net = £
tax = £
Employers tax =£

Thank you in advance for any help
Richi

 

[Andrew Poulsom]

How do you get £3096.50 from £1000 + 33% tax + 32.82% employers tax? I make it £1766.51.

 

[Richie(UK)]

Hi Richi,

Not sure that I follow the calculation forwards let alone backwards! :wink:

How do you arrive at the figures quoted? Presumably the employers tax is based upon the employees gross figure - perhaps you could confirm this.

 

[richiwatts]

Lets say for an employee to recieve £1000 in his/her pocket the total cost for the company would be:

1000 + 33% tax = gross
gross + 32.82% employers tax = what the company needs to employ someone.

Lets say the company can afford £4000 per month to employ someone, how would you find out how much of that £4000 will be allocated to:

net
tax
employers tax

Richi

 

[richiwatts]

Sorry I calculated the first post wrong it should be 1766.51, but you get the idea

 

[DonkeyOte]

Have you looked at "Goal Seek" scenarios in Excel? This sounds ideally suited to that...

 

[Andrew Poulsom]

Amount before employer's tax is:

4000*(100/(100+32.82)) call this A

Amount before tax is

A*(100/(100+33))

 

[richiwatts]

Thank you Andrew. That is what I was trying to achieve.

 

[Richie(UK)]

Hold on a minute, if £1000 is net of 33% tax then surely the gross is £1492.54.

£1492.54 * 33% = £492.54

Then the total would be £1492.54 * 1.3282 = £1982.39.

Working with £4000 as an example, then the employers tax would be :

£4000 * 32.82/132.82 = £988.41

This gives an employee gross figure of £3011.59. The employees tax is 33% of this:

£3011.59 * 33% = £993.82, net = £2017.77

So, for a given value (x) the employers tax (ert) = x * 32.82/132.82. The employees tax (eet) = (x-ert)*33%. The net is, therefore, x-ert-eet.

HTH, and hope I've understood the situation correctly! :wink:

 

[royUK]

If you gross payment of £4000 includes 33% tax, then multiply by 24.8% to get the net figure.
Divide your rate(33) by the gross (133)and multiply by 100 to get the net %

The gross figure for the 38.2 tax should be multiplied by 27.64%

If the £4000 includes both taxes multiply by 45.37 to get the tax element.

I think this is right