Match Index Function

Good day

I just need to adjust the requirements.

The marginal tax rate will be used to indicate in which bracket the employee falls. Then I would need to calculate the average tax rate to determine the Net Pay

Here is an explanation from ChatGPT, but struggle to translate this into a formula:

Given:
• Income: R500,000

Tax brackets and rates in South Africa for the tax year 2023/2024:
• Income up to R205,900: 18% tax rate
• Income between R205,901 and R321,600: 26% tax rate
• Income between R321,601 and R445,100: 31% tax rate
• Income between R445,101 and R584,200: 36% tax rate
• Income between R584,201 and R744,800: 39% tax rate
• Income above R744,800: 41% tax rate

Calculation:
• Tax on income up to R205,900 = R205,900 * 0.18 = R37,062
• Tax on income between R205,901 and R321,600 = (R321,600 - R205,900) * 0.26 = R33,324
• Tax on income between R321,601 and R445,100 = (R445,100 - R321,600) * 0.31 = R40,840
• Tax on income between R445,101 and R500,000 = (R500,000 - R445,100) * 0.36 = R19,260
• Total tax paid = R37,062 + R33,324 + R40,840 + R19,260 = R130,486

Now, let's calculate the marginal tax rate:
Since the income of R500,000 falls into the fourth tax bracket, the marginal tax rate is 36%.

Finally, let's calculate the average tax rate:
Average tax rate = Total tax paid / Total income
= R130,486 / R500,000
≈ 0.26097 or 26.097%

So, for an individual with an income of R500,000 in South Africa for the tax year 2023/2024:

• Marginal tax rate: 36%
• Average tax rate: Approximately 26.097%

With this information can determine that the Net Pay is R500 000 * (1-0.26097) = R369 515

Your assistance would be greatly appreciated.