Author Topic: Calculating Benefit of Additional Salary  (Read 4714 times)

oldtoyota

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Calculating Benefit of Additional Salary
« on: March 20, 2014, 12:53:42 PM »
Let's say I had a job offer or two. One offered $15K more, and the other offered $25K more.

What is the best way to calculate how much I would take home from each potential salary?

In a real world scenario, I would not just be considering $$, of course. I am curious how much an increase in pay would really affect me and whether it's worth it or not to pursue such an increase.


MDM

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Re: Calculating Benefit of Additional Salary
« Reply #1 on: March 20, 2014, 01:05:09 PM »
Depends on the tax bracket for the extra amount.

Easiest thing for you to do might be to take your 2013 tax return and refigure based on the extra $15K and then $25K.  You'd need to calculate Soc. Sec. and Medicare separately.

oldtoyota

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Re: Calculating Benefit of Additional Salary
« Reply #2 on: March 20, 2014, 01:13:30 PM »
Depends on the tax bracket for the extra amount.

Easiest thing for you to do might be to take your 2013 tax return and refigure based on the extra $15K and then $25K.  You'd need to calculate Soc. Sec. and Medicare separately.

Thank you. I have an elementary question. What percentage would I remove for Medicare and SS? Is the best way to figure out the percentage taken out of the previous salary and assume that the percentage stays the same? I am learning how that works...

MDM

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Re: Calculating Benefit of Additional Salary
« Reply #3 on: March 20, 2014, 01:45:08 PM »
Take a look at http://www.suburbancomputer.com/tips_tax.htm and http://money.cnn.com/magazines/moneymag/money101/lesson18/index3.htm and http://money.cnn.com/magazines/moneymag/money101/lesson18/index4.htm

Happy to discuss more if those don't give you what you need.

The short answer to your question is 6.2% for SS and 1.45% for Medicare - but see the links for the exceptions.

Numbers Man

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Re: Calculating Benefit of Additional Salary
« Reply #4 on: March 20, 2014, 01:49:26 PM »
All thing being equal, I would take the higher salary (who cares about the tax bracket). Take this time to talk to employees at the companies to see if you're working with normal people or a bunch of dicks. Then weigh the commute and hours that you need to put in to get the job done.

dragoncar

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Re: Calculating Benefit of Additional Salary
« Reply #5 on: March 20, 2014, 03:06:00 PM »
You can also preview your paycheck at paycheckcity.com.  It won't work if you have a lot of deductions, but it can give you a good picture including state&local taxes, FICA, etc.

(free, but account required)
« Last Edit: March 20, 2014, 03:52:34 PM by dragoncar »

MDM

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Re: Calculating Benefit of Additional Salary
« Reply #6 on: March 20, 2014, 03:30:41 PM »
dragoncar, thanks that is a useful site. 

I was able to do calculations without establishing an account.  That is, after I figured out it wasn't only for Arizona because you can select your state as part of data entry after clicking on one of the large icons (e.g., "$ Salary Paycheck") at the top of the home page.

Cheddar Stacker

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Re: Calculating Benefit of Additional Salary
« Reply #7 on: March 20, 2014, 03:40:42 PM »
You might benefit from checking out the thread serpentstooth posted last week about considering a new job offer. She put together a spreadsheet that detailed the financial benefits of old job vs. new job.

Cheddar Stacker

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oldtoyota

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Re: Calculating Benefit of Additional Salary
« Reply #9 on: March 20, 2014, 06:02:58 PM »
Take a look at http://www.suburbancomputer.com/tips_tax.htm and http://money.cnn.com/magazines/moneymag/money101/lesson18/index3.htm and http://money.cnn.com/magazines/moneymag/money101/lesson18/index4.htm

Happy to discuss more if those don't give you what you need.

The short answer to your question is 6.2% for SS and 1.45% for Medicare - but see the links for the exceptions.

Thank you. I will read these.

oldtoyota

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Re: Calculating Benefit of Additional Salary
« Reply #10 on: March 20, 2014, 06:03:53 PM »
You might benefit from checking out the thread serpentstooth posted last week about considering a new job offer. She put together a spreadsheet that detailed the financial benefits of old job vs. new job.

I missed that one. Thank you. I'll search for it.