The net pay is 54% in this example, not the tax. The tax situation really depends on the earner and what state they live in. Someone single living in a relatively high income tax state might have an overall rate of 18% or more, just for the tax part.
Other deductions from gross income include Social Security & FICA. And if there is company ‘provided’ health insurance there is likely additional cost to the employee as well.
Many people also put pre-tax money in retirement or health care savings programs. These are deductions from gross income, but are staying in the account of the earner.
I ran the numbers for my jurisdiction. For just tax, it comes out to 21%. If you add employment insurance, the socialized healthcare premium, and government pension (these are all mandatory) it goes up to 27%.
If you invest 20% of your take-home in retirement, that brings you to a 44% deduction, but I gently question whether you should do that if you’re struggling to put food on the table.
The net pay is 54% in this example, not the tax. The tax situation really depends on the earner and what state they live in. Someone single living in a relatively high income tax state might have an overall rate of 18% or more, just for the tax part.
Other deductions from gross income include Social Security & FICA. And if there is company ‘provided’ health insurance there is likely additional cost to the employee as well.
Many people also put pre-tax money in retirement or health care savings programs. These are deductions from gross income, but are staying in the account of the earner.
I ran the numbers for my jurisdiction. For just tax, it comes out to 21%. If you add employment insurance, the socialized healthcare premium, and government pension (these are all mandatory) it goes up to 27%.
If you invest 20% of your take-home in retirement, that brings you to a 44% deduction, but I gently question whether you should do that if you’re struggling to put food on the table.