Author Topic: what gets taken out of a paycheck in the US?  (Read 8030 times)

FuckRx

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what gets taken out of a paycheck in the US?
« on: March 09, 2014, 05:17:47 PM »

i don't get a W2 but just for living in the US and working what all are things we pay?
i have no clue but these are the things that i'm pretty sure we pay... federal tax, state tax, CALPERS (dunno what it is), social security (tax?), medicare (fees, tax?)

arebelspy

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Re: what gets taken out of a paycheck in the US?
« Reply #1 on: March 09, 2014, 05:21:41 PM »
Calpers is a contribution to a pension retirement fund, only people in a job that has that would contribute to it (California teachers, cops, etc.).

This may help you: https://www.google.com/search?q=what+are+all+these+deductions+from+my+paycheck
« Last Edit: March 09, 2014, 05:23:13 PM by arebelspy »
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bikebum

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Re: what gets taken out of a paycheck in the US?
« Reply #2 on: March 09, 2014, 05:25:45 PM »
Social Security is like a mandatory retirement program. You contribute to it and at some age (62 I think) you get a pension based on how many years you paid into the system and how much money you made. Not all jobs require Social Security payments.

Medicare is kind of like Social Security but it pays for medical expenses.

You can google these terms and find out more; the government has a site that explains it all.

Spork

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Re: what gets taken out of a paycheck in the US?
« Reply #3 on: March 09, 2014, 05:32:50 PM »
Social Security is like a mandatory retirement program. You contribute to it and at some age (62 I think) you get a pension based on how many years you paid into the system and how much money you made. Not all jobs require Social Security payments.

Not really.  It's an entitlement program.  (I'm not trying to use that word as a firestarter... You can agree or disagree with whether we should have entitlement programs -- that's just what it is.)  It's not something you pay into that gets invested and then get your money back out of like a pension.  Money coming in now is paid out now.  Maybe I'm over analyzing...  but my point is that over time the rules have changed drastically as political winds change directions.  It's not some defined benefit plan.

bikebum

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Re: what gets taken out of a paycheck in the US?
« Reply #4 on: March 09, 2014, 06:37:46 PM »
Social Security is like a mandatory retirement program. You contribute to it and at some age (62 I think) you get a pension based on how many years you paid into the system and how much money you made. Not all jobs require Social Security payments.

Not really.  It's an entitlement program.  (I'm not trying to use that word as a firestarter... You can agree or disagree with whether we should have entitlement programs -- that's just what it is.)  It's not something you pay into that gets invested and then get your money back out of like a pension.  Money coming in now is paid out now.  Maybe I'm over analyzing...  but my point is that over time the rules have changed drastically as political winds change directions.  It's not some defined benefit plan.

I don't think what you are saying is incompatible with what I said. I didn't say the money is "invested." I think a "pension" is just a fixed payment during retirement which could come from a variety of sources. Your explanation is probably more realistic than mine. I don't have an opinion on whether or not Social Security is a good thing.

FuckRx

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Re: what gets taken out of a paycheck in the US?
« Reply #5 on: March 14, 2014, 01:05:47 PM »
this take home pay calculator is genius...
very useful in case someone else needs it

http://www.paycheckcity.com/calculator/salary/

dragoncar

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Re: what gets taken out of a paycheck in the US?
« Reply #6 on: March 14, 2014, 01:48:17 PM »
Social Security is like a mandatory retirement program. You contribute to it and at some age (62 I think) you get a pension based on how many years you paid into the system and how much money you made. Not all jobs require Social Security payments.

Not really.  It's an entitlement program.  (I'm not trying to use that word as a firestarter... You can agree or disagree with whether we should have entitlement programs -- that's just what it is.)  It's not something you pay into that gets invested and then get your money back out of like a pension.  Money coming in now is paid out now.  Maybe I'm over analyzing...  but my point is that over time the rules have changed drastically as political winds change directions.  It's not some defined benefit plan.

It's an entitlement retirement program in that paying into the program entitles you to receive retirement benefits.

curler

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Re: what gets taken out of a paycheck in the US?
« Reply #7 on: March 14, 2014, 03:01:03 PM »
Since I have a pay stub on hand:

Starting next month, $130/month will be deducted to cover my transit pass (you save money by paying for it pre-tax) and $380/month will be deducted to cover my health insurance. Those come straight off the top, before other deductions, I think. Come August 90% of my salary will also be deducted after Social Security and Medicare taxes are taken to fund my 401k. Since the other deductions are based on income, they will  drop accordingly.

The healthcare deduction will come straight off the top.  The transit pass will come off before the federal taxes but after the FICA ( Social Security and Medicare Taxes).

Eric

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Re: what gets taken out of a paycheck in the US?
« Reply #8 on: March 14, 2014, 03:26:07 PM »
New York City Income Tax: -54.22
Covers all the cash and prizes paid for by the city government. I believe NYC is the only city in America to have a local income tax.

There are lots of them.  Michigan has 22 of them:

http://www.michigan.gov/taxes/0,4676,7-238-43715-153955--F,00.html



Spork

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Re: what gets taken out of a paycheck in the US?
« Reply #9 on: March 14, 2014, 06:51:54 PM »
Social Security is like a mandatory retirement program. You contribute to it and at some age (62 I think) you get a pension based on how many years you paid into the system and how much money you made. Not all jobs require Social Security payments.

Not really.  It's an entitlement program.  (I'm not trying to use that word as a firestarter... You can agree or disagree with whether we should have entitlement programs -- that's just what it is.)  It's not something you pay into that gets invested and then get your money back out of like a pension.  Money coming in now is paid out now.  Maybe I'm over analyzing...  but my point is that over time the rules have changed drastically as political winds change directions.  It's not some defined benefit plan.

It's an entitlement retirement program in that paying into the program entitles you to receive retirement benefits.

and because the amount paid in and taken out have no relation to each other.


...and because the right to take out of it is not guaranteed and can be denied by the government.  This was established by the Supreme Court in Fleming v. Nestor.

Quote
To engraft upon the Social Security system a concept of ‘accrued property rights’ would deprive it of the flexibility and boldness in adjustment to ever changing conditions which it demands.... It is apparent that the non-contractual interest of an employee covered by the [Social Security] Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits is bottomed on his contractual premium payments.

There are no property rights here at all.  It isn't a pension.  It has no growth.  Money comes in one side and goes out the other.  The rules as to how much is taken out and how much is given back changes pretty regularly.  Note: It was explicitly advertised as "your money" with such property rights when it was created.  It also was promised the amount of tax was never to exceed 3%.

edit to add: My point here is that pension programs have serious legal requirements to be backed by the money that is owed.  In fact, you also have to pay into an insurance company just in case you go broke and cannot continue to pay in what is required to get the expected outlay.  A pension is a savings program.  Social security isn't.  It's quite non-mustacian in its implementation. 
« Last Edit: March 14, 2014, 06:55:50 PM by Spork »

dragoncar

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Re: what gets taken out of a paycheck in the US?
« Reply #10 on: March 14, 2014, 07:15:35 PM »

and because the amount paid in and taken out have no relation to each other.

As of now, they do.

Quote
...and because the right to take out of it is not guaranteed and can be denied by the government.  This was established by the Supreme Court in Fleming v. Nestor.

Nothing is guaranteed, and anything can be effectively denied by the government.

beltim

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Re: what gets taken out of a paycheck in the US?
« Reply #11 on: March 14, 2014, 07:22:24 PM »
There are no property rights here at all.  It isn't a pension.  It has no growth.  Money comes in one side and goes out the other.  The rules as to how much is taken out and how much is given back changes pretty regularly.  Note: It was explicitly advertised as "your money" with such property rights when it was created.  It also was promised the amount of tax was never to exceed 3%.

edit to add: My point here is that pension programs have serious legal requirements to be backed by the money that is owed.  In fact, you also have to pay into an insurance company just in case you go broke and cannot continue to pay in what is required to get the expected outlay.  A pension is a savings program.  Social security isn't.  It's quite non-mustacian in its implementation.

I'm curious why you think Social Security (the retirement and survivors portion) isn't a pension.  It's just like every government pension - there is no account with an individual's claim on it, benefits are always subject to the government's ability to pay it, and there are no premiums paid to the PBGC.  These are all common features to government pensions.

Zaga

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Re: what gets taken out of a paycheck in the US?
« Reply #12 on: March 14, 2014, 07:35:51 PM »
New York City Income Tax: -54.22
Covers all the cash and prizes paid for by the city government. I believe NYC is the only city in America to have a local income tax.

There are lots of them.  Michigan has 22 of them:

http://www.michigan.gov/taxes/0,4676,7-238-43715-153955--F,00.html

Oh, I had no idea! Thanks!
Every town and city I have ever lived in has had a local income tax.  They've all been 1%, but I know of one town near me that is 2.5% and another big city that is 3%.  I always figured that it was more common to have a local income tax than to not have one.

jnik

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Re: what gets taken out of a paycheck in the US?
« Reply #13 on: March 15, 2014, 08:31:25 AM »
Every town and city I have ever lived in has had a local income tax.  They've all been 1%, but I know of one town near me that is 2.5% and another big city that is 3%.  I always figured that it was more common to have a local income tax than to not have one.
The place I lived in Michigan had a local income tax (requiring separate filing!) and that's the only one I've ever paid. Iowa (and I think Illinois as well) had a "school district" tax that was roughly a county tax. Those were pretty easy, actually, a simple surtax on the state form. NM and MA were state-only; NM does local taxation via tack-ons to the GRT (gross receipts tax, sort of sales tax but not quite.) I'm sure there's a lot of history behind it all: MA dissolved most county governments in the 90s; IA/IL have the legacy of homesteading; NM may be a legacy of Spanish law or simply late statehood (the other half of NM territory also having essentially a GRT).

Ain't the US great.

Spork

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Re: what gets taken out of a paycheck in the US?
« Reply #14 on: March 17, 2014, 07:20:58 AM »
There are no property rights here at all.  It isn't a pension.  It has no growth.  Money comes in one side and goes out the other.  The rules as to how much is taken out and how much is given back changes pretty regularly.  Note: It was explicitly advertised as "your money" with such property rights when it was created.  It also was promised the amount of tax was never to exceed 3%.

edit to add: My point here is that pension programs have serious legal requirements to be backed by the money that is owed.  In fact, you also have to pay into an insurance company just in case you go broke and cannot continue to pay in what is required to get the expected outlay.  A pension is a savings program.  Social security isn't.  It's quite non-mustacian in its implementation.

I'm curious why you think Social Security (the retirement and survivors portion) isn't a pension.  It's just like every government pension - there is no account with an individual's claim on it, benefits are always subject to the government's ability to pay it, and there are no premiums paid to the PBGC.  These are all common features to government pensions.

I'm not a financial analyst.  My understanding may be incorrect.  But I've always understood a pension to be this.

libertarian4321

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Re: what gets taken out of a paycheck in the US?
« Reply #15 on: March 21, 2014, 08:12:12 AM »
Taxes, taxes, taxes, and more taxes.