ExpertMedium2 marksStructured
AQA GCSE · Question 19.1 · How markets work
Using Figure 2, calculate Tharun's annual net pay.
Figure 2
Gross pay (monthly) £2500 National Insurance contributions (monthly) £270 Income tax (monthly) £350
Using Figure 2, calculate Tharun's annual net pay.
Figure 2
| Gross pay (monthly) | £2500 |
| National Insurance contributions (monthly) | £270 |
| Income tax (monthly) | £350 |
How to approach this question
1. First, calculate the total monthly deductions by adding National Insurance and Income Tax. 2. Subtract the total monthly deductions from the monthly gross pay to find the monthly net pay. 3. Multiply the monthly net pay by 12 to find the annual net pay.
Full Answer
1. Calculate monthly deductions: £270 (NI) + £350 (Tax) = £620.
2. Calculate monthly net pay: £2500 (Gross) - £620 (Deductions) = £1880.
3. Calculate annual net pay: £1880 * 12 = £22,560.
Net pay is the amount of an employee's pay remaining after all deductions have been taken from the gross pay.
- **Gross Pay (monthly):** £2500
- **Total Deductions (monthly):** £270 (NI) + £350 (Income Tax) = £620
- **Net Pay (monthly):** £2500 - £620 = £1880
- **Net Pay (annual):** £1880 × 12 months = £22,560.
Common mistakes
Forgetting to multiply the monthly net pay by 12 to get the annual figure, or just adding up all the numbers in the table.
Practice the full AQA GCSE Economics Paper 1
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