Income tax

Topic Aims

From the programme of study for economic well-being at key stage 3:

1.4 Economic Understanding a. understanding the economic and business environment. b. understanding the functions and uses of money.

Learning Outcomes

Students learn about how tax will affect them when they start earning a wage.

Students understand what a tax code is and how to calculate income tax.

Introduction

Ask the students to name as many different kinds of taxes they can think of. Write their answers on the board.

Explain that in today’s lesson they will be learning more about money, taxes, and how tax will affect what they earn when they leave school, college or university.

Display the PowerPoint (this will be a recap exercise if the students have already done the previous activity in this module).

When the students get to slide 3, explain the wage slip to them.

If this is hard to see on screen, print copies out of this slide and distribute to pairs.

Ask the students what the key elements of the wage slip are.

They could point out the amount of salary (note that in this example the employee is not paid by the hour so the hours are noted as 1), the tax and national insurance paid on this amount, the total gross pay, the total net pay, and the tax code. Note the difference between gross (before tax) and net (after tax).