Refer to table 1, which shows the tax levels in an economy. A person earning €12,000 pays income tax equal to ?
Table 1
$\begin{array}{|l|l|}
\hline \text { Band } 1=€ 0 \text { to } € 10,000 & \text { No tax } \
\hline \text { Band } 2=€ 10,001 \text { to } € 50,000 & \text { Taxed at } 20 \% \text { of earnings } \
\hline \text { Band } 3=€ 50,001 \text { to } € 100,000 & \text { Taxed at } 30 \% \
\hline \text { Band } 4=€ 100,001 \text { and above } & \text { Taxed at } 40 \% \
\hline
\end{array}$
?

Question

Quizplus · Accepted Answer

Since the person earns €12,000, they fall into the second tax bracket. Therefore, they will only be taxed 20% of their earnings above €10,000. So, the amount of tax paid would be €400, calculated as (€12,000 - €10,000) x 20%. Therefore, the correct answer is B.

Refer to Table 1, Which Shows the Tax Levels in an Economy