How to Calculate Income Tax Based on Profit Before Tax

What is the formula to calculate income tax based on profit before tax?

Given that profit before tax is R15,700,000 and income tax rate is 30%, how do we determine the income tax amount?

Calculation of Income Tax

The income tax amount can be calculated using the following formula:

Income tax = Profit before tax x Tax rate.

To calculate the income tax, we need to multiply the profit before tax by the tax rate. In this case, the profit before tax is R15,700,000 and the tax rate is 30%, which means 0.30 in decimal form.

Income tax = R15,700,000 x 0.30

Income tax = R4,710,000

Therefore, the income tax amount is R4,710,000. This represents 30% of the profit before tax. Income tax is an expense that companies incur based on their taxable income and the applicable tax rate.

← Evaluating dog groomers performance the impact of supervisor bias How to accrue interest earned on a note receivable →

More Posts: