PAYE Query - significantly less tax if spouse earns even €1?

S

Sadmak

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I was inputing some figures into Karl Grabes tax calculator.
I am joint assessed for tax reasons

If i input 100k into the formula for my 05 income and 0 for my wife
My tax bill is 29122

If i input 100k and also put my wifes earnings as €1
my tax bill is 27852.2

therefore by my wife earning 1 euro my tax bill is reduced by €1,269.80

Firstly am i correct and secondly does anyone know the rational behind this.
 
Re: PAYE Query

If this is correct then the answer may be individualisation.

P.S. Please make the meaningful. I had to change this one from "PAYE Query" which is largely meaningless.
 
Re: PAYE Query - significantly less tax if spouse earns even €1?

Sadmak said:
I was inputing some figures into Karl Grabes tax calculator.
I am joint assessed for tax reasons

If i input 100k into the formula for my 05 income and 0 for my wife
My tax bill is 29122

If i input 100k and also put my wifes earnings as €1
my tax bill is 27852.2

therefore by my wife earning 1 euro my tax bill is reduced by €1,269.80

Firstly am i correct and secondly does anyone know the rational behind this.
Click to expand...

I've never used that calc but I'm assuming you put your wife's €1 in as PAYE income. The calc is giving the PAYE credit of €1270 (less 20% tax on €1) = €1,269.80, which is incorrect

The PAYE tax credit should be restricted to 20c, so there is no difference
 
OK - so the individualisation issue relating to the taxation of married couples with [broken link removed] is probably not the explanation? I've emailed this link to Karl Grabe for him to have a look at.
 
Re: PAYE Query - significantly less tax if spouse earns even €1?

I'll take a look at it when I get a chance. k
 
no - my understanding is that your hubbie (or wife as the case might be!) has to earn at least 25,000 in order to get the benefit of tax individualisation. Other wise the higher earner pays the higher rate on any income he (or she) earns over 43k.
 
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