After-tax interest expense is the amount of money that a company pays for the interest on its debt after deducting the tax benefit. It shows how much interest expense reduces the company’s net income. Interest expense is the cost of borrowing money from lenders or bondholders. The tax benefit is the amount of money that a company saves on taxes by deducting the interest expense from its taxable income. The formula for after-tax interest expense is:
After-tax interest expense = Interest expense * (1 - Effective tax rate)
Where:
- Interest expense is IS014,
is_int_expense
- Effective tax rate is R0033,
eff_tax_rate