Last answered:

11 Nov 2023

Posted on:

02 May 2023


Benefit of Average tax rate :

what is the benefit of calculating Average tax rate and can you give me an example plaese??

1 answers ( 0 marked as helpful)
Posted on:

11 Nov 2023


Average tax rate gives you a broad view of the percentage of your income that goes towards taxes.

Let's say an individual has a total income of $50,000 and pays $10,000 in taxes. The average tax rate would be calculated as follows:

Average Tax Rate= Income Tax/EBT

Average Tax Rate = $10,000/$50,000

Average Tax Rate: 0.20

This means that, on average, 20% of the individual's income goes towards taxes.

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