The Money Mustache Community

Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: bigotepequeno on April 29, 2017, 06:15:01 PM

Title: New job and trying to estimate new monthly take home pay--check my numbers?!
Post by: bigotepequeno on April 29, 2017, 06:15:01 PM
Hi Everyone, I’m about to sign a contract for a new position and am trying to determine what my new paycheck might look like and would really appreciate to have someone check my numbers for me.  I'm a financial 9th grader and pretty new to MMM--have been lurking for a year or so--but am ready to be more actively involved soon... Thanks for any help with the below question!

My new salary of $135,000 is a 10.6% increase over my present salary of $122,000.

Here’s my math so far…

My estimated Federal Taxes look like $30,800 per year, as follows:

$135,000 - $91,000 = $44,000 X .28 = $12,320 ($12,300)

$12,300 + $18,500 = $30,800 per year in Federal Taxes (roughly 22.8% of total earnings ($135,000))

Federal Tax Amount = $30,800
Federal Tax Bracket: 28%
Federal Tax as a Percentage of Income: 22.8%

My estimated CA tax is: $7,800 (used an online ca.gov calculator)

This brings  my combined taxes to $38,600:

Federal taxes $30,800 plus state taxes $7,800 = $38,600
$135,000 - $38,600 = $96,400 annually or $8,000 per month

Defined Contribution Plan would be roughly $8,775 per year or $750 per month
$8,000 – $750 (pension program deduction) = $7,250 per month

Given that this is only a 10.6% salary increase, I don’t see how this number could be right…. I would have thought that the figure should be more like $6,400…

Am I missing something big? 

My only thought is that the tax deferral of the $18,000 per year in the 403B program (which is new for the new position) might account for the difference?  Could this somehow account for another $850 per month in my take home pay?! Doesn't seem plausible, then then, that's why I'm asking...

Thanks much for any help/clarification/etc. This forum is fantastic!
Title: Re: New job and trying to estimate new monthly take home pay--check my numbers?!
Post by: braje on April 29, 2017, 06:40:57 PM
Try runNing your numbers  in paycheckcity.com
Title: Re: New job and trying to estimate new monthly take home pay--check my numbers?!
Post by: MDM on April 29, 2017, 09:13:58 PM
Try runNing your numbers  in paycheckcity.com
That will tell someone what the net will be, given a particular W-4.

What may be more useful is what the net should be if the W-4 is completed perfectly.  For that, running 2017 estimated income through a commercial tax program (TaxAct, TurboTax, etc.) may give the best estimate, although the tax brackets, phase-out regions, etc. will be a little different in 2017 vs. 2016.  The case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/) can also provide an estimate.
Title: Re: New job and trying to estimate new monthly take home pay--check my numbers?!
Post by: Ebrat on April 30, 2017, 09:17:22 AM
FICA?
Title: Re: New job and trying to estimate new monthly take home pay--check my numbers?!
Post by: MDM on April 30, 2017, 09:46:45 AM
FICA?
That's an ambiguous question....
Title: Re: New job and trying to estimate new monthly take home pay--check my numbers?!
Post by: bigotepequeno on April 30, 2017, 10:07:52 AM
Thanks for the online tool recommendations, MDM and braje--I was unfamiliar with both of these.