# The table below shows income tax rates

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The table below shows income tax rates

 Monthly income Tax Rate (Kshs) (%) Up to 9680 10 9681 – 18800 15 18801-27920 20 27921-37040 25 37041 and above 30

Omari’s monthly taxable income is Ksh. 24200

1. Calculate the tax charged on Omari’s monthly earnings.
2. Omari is entitled to the following tax relief of 15% of the premium paid.
Calculate the tax Omari pays each month if he pays a monthly insurance premium of Ksh. 2400
3. During a certain month, Omari received additional earnings which were taxed at 20% each shilling. Given that he paid 36.3% more tax that month, calculate the percentage increase in his earning.

1. Calculate the tax charged on Omari’s monthly earnings.
Tax on 1st ksh 9680 = 9680 x 10/100 = kshs. 968
Tax on 2nd kshs. 9120 = 9120 x 15/100= kshs 1368
Tax on rem kshs. 5400 = 5400 x 20/100= ksh 1080
Total tax = 968 + 1368 + 1080 = kshs. 3416
2. Omari is entitled to the following tax relief of 15% of the premium paid.
Calculate the tax Omari pays each month if he pays a monthly insurance premium of Ksh. 2400
Tax paid= 3416-(1056 + 2400 x 15/100)
= kshs. 2000
3. During a certain month, Omari received additional earnings which were taxed at 20% each shilling. Given that he paid 36.3% more tax that month, calculate the percentage increase in his earning.
Increase in tax paid = 2000 x 36.3= kshs. 726
Increase in earnings= kshs. 726 x 100/20= ksh. 3630
% increase = 3630 x 100
24200