Where did my paycheck go?

By pearl - July 28, 2014

So before you go out and buy that expensive car and rent that fancy apartment downtown, you better be sure what you are getting after tax. I  wish companies could tell you what you get after tax, PERIOD. Not telling me huge amounts only for me to get half of it in my darn pay check.. But they really can't. Why? Because everybody's situation is different. Some have dependent's, some don't, some are married. So much is considered into how much is taken off your paycheck. Unfortunately there is no one formula that works for everyone.

When I got my offer in my senior year in college, I was excited. I had a long list of things I was going to buy with my first pay. I mean this isn't the first paycheck I was getting. I started working at 18, and I did everything from being a cashier, to home health aid, to technical internships and research assistant in school. I had quite an idea about taxes, but none of these quite prepared me for my "tax shock".  So if you are fresh out of college and have your offer in hand, there are a couple of things you can do to figure out what your  actual first net pay will be. I strongly advice you do this before planning anything. Yes hold on to that apartment and furniture until you do this. The following come to play in how much you get taxed.

1. How you fill out your W4

Most likely on your first day at work, you will be asked to fill out this form, which determines how much will get deducted from your paycheck. Be careful and pay attention when filling out this form. It also determines how much you get back or owe at the end of the year. If you are single, you want to file 1, unless you are still a dependent, then file zero. You can read a ton more on filling out your W4 here.

2. State tax

Every state likely has it's own tax rate. So depending on the state you work in, the percentage you get taxed varies. If you are one of the lucky ones in tax free state, you have nada to worry about. This could also depend on how much your household earns. You can check your state's tax rate here.

3.  Federal taxes

Last but usually the most, federal taxes. These are the same for everyone, but also depends on how much you earn in your household. Here are the tax percentages for singles..

  • 10% on taxable income from $0 to $9,075, plus
  • 15% on taxable income over $9,075 to $36,900, plus
  • 25% on taxable income over $36,900 to $89,350, plus
  • 28% on taxable income over $89,350 to $186,350, plus
  • 33% on taxable income over $186,350 to $405,100, plus
  • 35% on taxable income over $405,100 to $406,750, plus
  • 39.6% on taxable income over $406,750.
If you ain't single, you can always find out your tax rate here.
With all this said, more might be coming off your paycheck for health insurance and 401K(I hope it is). Hopefully you get an estimate of what your net pay is and plan accordingly. Oh and mind you this gets even more brutal on bonuses and relocation allowances..#grownupproblems.

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  1. To determine your paycheck or bonus after taxes, use the calculators at paycheckcity.com. The calculators are fairly accurate, so there won't be any surprises when you get your paycheck.

    1. Oh yea I know there are a couple of calculators out there. Good to know. 😊