3 ms·
No, because in this setting your original take home was £1.00. To lay it out in numbers: BEFORE £1 pay increase: £X earnings, £Y benefits AFTER £1 pay increa
by johnday 7y ago
No, because in this setting your original take home was £1.00.
To lay it out in numbers:
BEFORE £1 pay increase: £X earnings, £Y benefits
AFTER £1 pay increase: £X + 1 earnings, £Y - 0.63 benefits
DIFFERENCE: £0.37
So a pay increase of £1 leaves you with an actual total increase of £0.37. This corresponds to an effective tax rate of £0.63.