After-tax income


Problem: Sonja is a United States citizen who has worked in Spain for the past 10 months. She received $5,000 a month as compensation. Her employer has offered to extend Sonja's contract to work in Spain for another 5 months at the same rate of pay. If she rejects the offer, she can return to the United States and receive the same salary. While working in Spain , she is subject to the Spain income tax, which is approximately 11% of her gross pay. The marginal tax rate on her income tax in the United States is 25%. Compare Sonja's after-tax income assuming she remains in Spain with her after-tax income if she returns to United States.

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Accounting Basics: After-tax income
Reference No:- TGS01619525

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