Java Reference
In-Depth Information
Let's use an example. Our gross salary calculation (pay rate * 40) is not very useful. For instance, most
organizations need a net salary calculation that takes into consideration income tax. The tax rate is dependent on how
much is earned. For instance, if an employee's weekly salary is less than $50, no taxes are withheld. However, if the
weekly salary is greater than $50, then the tax is 12 percent on all income above $50 up to $150. If the weekly salary is
greater than $150, then the tax is $12 (that's 12 percent of the salary from $50 to $150) plus 15 percent of all income
over $150 up $550. (These salary numbers and tax percentages are, of course, fictional.)
Of course, there are exemptions. For each declared exemption, $60 of the gross weekly salary is not taxed. If you
think I'm making things unnecessarily complicated, I'm sorry, but this is really a very simplified version of the tax
calculation. For instance, we aren't taking into consideration: state, province, or city taxes, FICA, pretax retirement
deductions, pre-tax medical deductions, pre-tax tuition deductions, and so on.
We'll use the following rules for our new calculation.
Salary >
Tax +
Percentage
Of amount over
$50
$0 +
12%
$50
$150
$12 +
15%
$150
$550
$72 +
25%
$550
$1,150
$222 +
28%
$1,150
Another way to depict the calculation is shown in Figure
6-1
.
Figure 6-1.
