Sum Dum Gai
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Post by Sum Dum Gai on Apr 25, 2011 15:14:55 GMT -5
In another thread somebody mentioned adding the employers portion of SS and Medicare to your wages to see what your real salary and tax burden are. I've never done it, so I figured what the heck.
My stated base salary is $99,860.80. My employer has to pay $220.15 for SS, and $51.48 for Medicare per check. They also match my 401k at $153.63 per check, as well as covering $372.24 of my medical insurance,$25.94 of my dental, and a life insurance policy at $1.85. I get paid 26 checks a year, so they're paying a total of $21,457.54 in taxes and benefits on top of my salary. So I actually make $121,318.34 a year, not counting bonuses which I won't even try to include because it'll make the numbers a giant pain in the ass and I only get a couple thousand in bonus money anyway.
So using our new numbers I gross $121,318.34 a year, but I pay $21,605.22 (17.81%) in taxes, $14,979.12 (12.34%) towards retirement, and $18,389.28 (15.16%) in insurance premiums before I get my check. So I only net $66,344.72 (54.69%) of my pay. Damn, that's depressing.
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alabamagal
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Post by alabamagal on Apr 25, 2011 15:35:12 GMT -5
Your employer also has to pay federal unemployment tax and state unemployment tax (I think these are relatively small numbers), plus workers compensation insurance. The factor we used to use when I worked for a large corporation (which also had pension plan) was the cost of employee was salary plus 35%.
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jkscott
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Post by jkscott on Apr 25, 2011 15:36:31 GMT -5
Hidden salary brag.
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formerexpat
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Post by formerexpat on Apr 25, 2011 15:37:14 GMT -5
Would you prefer that you get 69.85% and then have to pay your own insurance premiums?
You could look at it and say that you get 67.03% of the net since you're simply contributing your 401k to your deferred retirement plan.
But, yes - this is exactly how a business looks at you. Your total compensation, or rather cost to them is $121.3k. This is very important and good for people to know when they want to become an independent contractor. Low balling your prices because you haven't accounted for some of these components can turn out bad.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 25, 2011 15:43:11 GMT -5
Hidden salary brag. LOL! Spoken like somebody who obviously hasn't seen the COL in this area. I'd probably have more disposable income working at Walmart in my hometown. I'd have much worse insurance, and no retirement savings, but probably about the same amount of discretionary spending in the budget. Would you prefer that you get 69.85% and then have to pay your own insurance premiums? I would actually. I'm 29, the wife is 32, the kids are 9 and 10. None of us have chronic conditions. We take no medications. I guarantee I could find cheaper health insurance than the $16,386.24 a year that I'm paying now through our employers group policy. The dental, vision, life, and disability seem reasonable, but the medical seems really high.
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shanendoah
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Post by shanendoah on Apr 25, 2011 15:48:17 GMT -5
I do the budget for my department, so I've been aware of these numbers for 5+ years. For every single employee at .75FTE or greater, we pay $1,018/month in medical benefits. (We are a health care company.) In addition, we pay another 15% of salary in non-medical benefits, as well as 9.3% of salary in taxes.
This means that my gross salary is 71.6% of what my employer actually pays. This percentage will vary based on salary level since we pay a flat rate for medical benefits.
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shanendoah
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Post by shanendoah on Apr 25, 2011 15:58:24 GMT -5
horatio: I suppose it is if you're young and healthy. But as someone who works in the medical field, I can tell you, union insurance is generally the best insurance to have if you ever need it. I work for a health care company that offers really good benefits for the cost, but its still a little worse bang for the buck than the carpenters' union members get. (Our facilities management is outsourced to another company and the carpenters work for them.)
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iono1
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Post by iono1 on Apr 25, 2011 16:11:37 GMT -5
My last salary when I worked was about $40,000 more than my pension, but my take home pay is only $17,000 less retired. I no longer pay Social Security, State Income Tax, Medicare, Health Insurance, and Union Dues.
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formerexpat
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Post by formerexpat on Apr 25, 2011 16:14:13 GMT -5
Possibly but remember that the insurance companies would have to adjust prices so to pool the costs of the overall population. I believe that you could find it cheaper than $16k per year and there would be various rate classes [non smoker v smoker] but more importantly, I think that if consumers were aware of the cost that they would bring the prices down. Once you are aware of the sticker price, you are more likely to pay attention to it.
I'd like to see all health insurance separated from the employer and everyone given the opportunity to deduct health insurance premiums on their 1040; not just the self employed.
This would seem to be a good way to stimulate the economy without people actually being paid more; they just get more of it to keep themselves and buy insurance that they need instead of something that's forced on them.
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whoisjohngalt
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Post by whoisjohngalt on Apr 25, 2011 16:43:07 GMT -5
Forget taxes, when I found out how much my DH's employer is paying for our insurance, let's just say, we won't be picking up Cobra any time soon. Lena
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jkapp
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Post by jkapp on Apr 25, 2011 19:08:03 GMT -5
401k company match: $400 Health insurance covered by employer: ~$5200 HSA employer contribution: $450 Employer porttion of FICA/MED: $3700 Fed unemployment: $56 State unemployment: $730 Workers Comp: ~$1500 (a bit difficult to figure out per employee as different types of workers have different rates)
So an extra $12k, or about an extra ~25% of salary
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azphx1972
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Post by azphx1972 on Apr 25, 2011 20:42:32 GMT -5
about an extra ~25% of salary
That's what it is for me as well.
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Post by pig on Apr 26, 2011 7:51:22 GMT -5
I'd like to see all health insurance separated from the employer and everyone given the opportunity to deduct health insurance premiums on their 1040; not just the self employed. Between my employer and myself, health insurance runs over 10k a year. As a family, we each see the doctor 6 times at most a year. Something is not right there.
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Bob Ross
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Post by Bob Ross on Apr 26, 2011 10:25:48 GMT -5
Awwwwwwww. Dark, you seem to like to talk about how much you make. You know, since you do it in like every third post.
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Nazgul Girl
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Post by Nazgul Girl on Apr 26, 2011 10:29:27 GMT -5
That's real nice, Dark. I sure could get by on half of what you make LOL ;D
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The J
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Post by The J on Apr 26, 2011 10:32:28 GMT -5
My weighted fringe benefit rates are calculated at 54% of my salary, meaning my total compensation is in the $135k range
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 26, 2011 12:18:34 GMT -5
Whoa, where did you get the little violin guy??? He's outstanding! I sure could get by on half of what you make LOL ;D It would be more painful than you think. The insurance cost wouldn't be any cheaper at all, the tax rate wouldn't go down by much since very little of that amount is income tax, and the retirement is a percentage so you'd probably want to leave that alone too. You'd bring home an even smaller percentage than I currently do, probably somewhere around 30k a year net. I had to move 45 minutes out to find a house we could afford and the mortgage is still $1,992 a month. You'd have about 6k left to cover all utilities, groceries, transportation costs, clothing, any activities and stuff for the kids, etc., etc. On half my salary you probably wouldn't want to buy here, but then again we were paying $1,650 a month to rent a two bedroom apartment before we bought the house, so housing costs would still kill you.
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shooter47
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Post by shooter47 on Apr 26, 2011 13:28:28 GMT -5
I'd like to see all health insurance separated from the employer and everyone given the opportunity to deduct health insurance premiums on their 1040; not just the self employed. Between my employer and myself, health insurance runs over 10k a year. As a family, we each see the doctor 6 times at most a year. Something is not right there. Usually health insurance is taken out of your pay pre-tax and therefore lowers your gross pay by that amount. You are paying health insurance with untaxed dollars therefore you can't deduct it on your taxes. If you seperated health insurance from employers and made and allowed it to be deducted on your taxes there would be no gain because it is already not taxed.
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Post by pig on Apr 26, 2011 14:17:04 GMT -5
Usually health insurance is taken out of your pay pre-tax
It's not.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 26, 2011 14:19:19 GMT -5
Mine is.
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Post by pig on Apr 26, 2011 14:43:22 GMT -5
Mine is not. In fact, my health insurance payments are deductable.
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Bob Ross
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Post by Bob Ross on Apr 26, 2011 14:47:43 GMT -5
I had to move 45 minutes out to find a house we could afford and the mortgage is still $1,992 a month. You'd have about 6k left to cover all utilities, groceries, transportation costs, clothing, any activities and stuff for the kids, etc., etc. On half my salary you probably wouldn't want to buy here, but then again we were paying $1,650 a month to rent a two bedroom apartment before we bought the house, so housing costs would still kill you. Hey now. Don't put your insane California living expenses on the rest of us. You know that in between your coast and the other one, you can live high on the hog for about tree fiddy.
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Deleted
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Post by Deleted on Apr 26, 2011 16:49:13 GMT -5
My wife has a side business and on $75K of profit (50% distributions and 50% taken as salary), we paid about $23K in taxes. That includes income taxes, both sides of FICA, and state. That's a 31% rate.
That's one of the major flaws for attempting to tax people that earn over $250K. My dad has an S-Corp so he reports profits on his individual tax return. And when he owes money, it comes directly out of his corporate checking account. So money taken by the gov't is not there for inventory, employees, etc.
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Post by robbase on Apr 27, 2011 16:14:45 GMT -5
you forgot to include the 401 K contribution that your employer most likely makes on your behalf...I am sure there is something else too I know Dark, I sympathize with you, it must be tough making ends meet on your base of $99K
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 27, 2011 16:27:56 GMT -5
The 401k match is in there. I did forget unemployment insurance though, and I'm not sure who much they have to pay for that anyway. I know Dark, I sympathize with you, it must be tough making ends meet on your base of $99K Thank you! Finally somebody else who understands the cross I bear. Wait... what is that little smiley face doing in there?
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haapai
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Post by haapai on Apr 27, 2011 18:36:13 GMT -5
I'd love to see my total payroll costs along with my pay stub. Seeing those numbers as a younger worker would have had an effect on how I regarded my employer. It would also have gone a long way toward explaining some of the decisions that employers made regarding early closes, overtime, and hiring.
It's absolutely scandalous how few people understand the employer's portion of social security. It's appalling how FUTA and SUTA are presented as terrifically onerous. (SUTA can be stiff if you have a lot of claims, but FUTA is pocket change.) The employer subsidy of health insurance is something that everyone should know. (You need to know what COBRA will cost.) I'm curious what workman's comp costs my employer.
Unfortunately, a lot of employers balk at revealing their SUTA rate and can be downright sloppy in the rest of their cost accounting. They can also be bizarrely reticent about revealing how much of the health insurance tab that they're picking up. (Methinks they should be shouting it from the rooftops or hiring a griot to publicize it but for some reason it seems to be treated with almost as much silly secrecy as SUTA rates.)
The result of all this reticence could be compensation breakdowns that are accurate regarding social security matches and laughable regarding other payroll costs. If I ever received a statement that listed a FUTA expense after I had exceeded the annual basis or which calculated employer paid health insurance as a percentage of gross pay (including overtime), I would throw that statement into the trash where it belonged.
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SVT
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Post by SVT on Apr 27, 2011 19:10:14 GMT -5
Hmm...how do I find out how much my employer is paying for health insurance? It's the difference between what Cobra would cost and what gets deducted from my pay? So I would need to ask my employer how much Cobra would cost?
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 27, 2011 19:21:34 GMT -5
Hmm...how do I find out how much my employer is paying for health insurance? Look at a pay stub from this year. They have to start putting it on there now. It was included in the health care bill I think.
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haapai
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Post by haapai on Apr 27, 2011 19:25:18 GMT -5
To the best of my knowledge, COBRA can be anywhere between 100% of the premium on your health insurance policy and 103% of the same.
You can either ask directly,"So, how much of my health insurance premium are you guys picking up?" or indirectly "What would COBRA cost me?". If you ask directly, you may be redirected in the most maddening fashion. If you ask indirectly and receive a number, you'll have to do some calculation and the number may be slightly off due to that small markup.
I've been sucessfully redirected every time that I attempted to get a bead on this question. There's something about having my fairly cut and dried questions deflected as if they were completely outlandish requests that makes it necessary for me to either leave the HR office or hang up the phone before losing my cool.
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SVT
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Post by SVT on Apr 27, 2011 19:30:22 GMT -5
Hmm...how do I find out how much my employer is paying for health insurance? Look at a pay stub from this year. They have to start putting it on there now. It was included in the health care bill I think. I already looked at my paystuf. It's not on there.
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