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Payroll tax model: Wikis


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The common Payroll tax models show the functional relation between Gross income of employees and Payroll tax rate. The following equations give us a new look on the Payroll tax rate estimation. There is another way that wasn't discovered until now.

(1) Income = Expenditures + Savings

The equa. (1) says, that income is expended + saved. The income is calculated from Gross income + Payroll tax rate. The gross income is a virtual gross income. The social security contributions are the sum of unemployment benefit, pension benefit, health insurance and are subducted from the gross income.

(2) Gross income (1 - Payroll tax rate) = Expenditures + Savings

Determination of the Payroll tax rate out of (2):

(3) Payroll tax rate = [Gross income - (Expenditures + Savings)] / Gross income

Equa. (3) calculates the Payroll tax rate from 3 variables; Expenditures, Savings, Gross income. The new model allows the government to control the economic situation over the Expenditures and Savings. With that model we can establish a tax for every kind of income, e.g. pensions, unemployment benefits, etc. We provide the Expenditures out of the payroll tax graph for the taxpayer. The discoverer of the model to calculate the Payroll tax rate is Thomas Maier.


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