Bigger salary, same ole pay check

October 8, 2005 10:42 AM

At my last job, i was making around 45k a year Taking home roughly $1500 after taxes and such. Now at my current job im making over 50k, but I take home about the same amount as i did when I was making 45k. $1500. Whats going on???
posted by buybelen to work & money (13 comments total)

Federal Income Tax Withholding? Doesn't your employer give you a breakdown of your earnings? You didn't mention where you live so I'm just assuming it's the U.S.
posted by rolypolyman at 10:56 AM on October 8, 2005

I have no idea what state you are in (or country for that matter), but you probably entered a new tax bracket and they take out a little more. Maybe you'll get a bigger refund at the end of the year.
posted by idiotfactory at 10:58 AM on October 8, 2005

This threw me at my new job because I was used to being paid on the 1st and 15th, and this job pays us biweekly, on Fridays. Once our finance director explained that I'm getting more paychecks, the difference made more sense. My salary only increased about $5,000, though, and I'm making less than you are. I'd guess that FICA has something to do with your situation as well.
posted by hamster at 11:04 AM on October 8, 2005

Surely your employer gives you an advice stub. Read it.
posted by Kwantsar at 11:07 AM on October 8, 2005

Income tax and FICA have nothing to do with it. FICA is a flat rate and so couldn't cause that. It's not federal income tax brackets, because there isn't a bracket change between $45K and $50K, as near as I can tell.

This really isn't hard. Look at the last pay stub from your old job, and note the pay period, gross pay, tax deductions, and other deductions. Do the same for a pay stub for the new job. Note the differences. That's what's going on.
posted by ROU_Xenophobe at 11:11 AM on October 8, 2005

Agreed. I make $4000 more a year than my husband, but our paychecks are roughly equal. He gets paid twice a month (24 paychecks annually); I get paid every other week (26 paychecks annually).
posted by junkbox at 11:47 AM on October 8, 2005

I'm betting the difficulty is in ROU_Xenophobe's "other deductions" category. If the new employer takes out more for health insurance, it could easily cause the extra 5K to disappear.

And if you're only bringing home $1500 of a $50,000 salary, you really should change jobs again.
posted by Kirth Gerson at 11:54 AM on October 8, 2005

$1500 on $50K is about right if you get paid every other week or twice a month.
posted by ROU_Xenophobe at 12:28 PM on October 8, 2005

And if you're only bringing home $1500 of a $50,000 salary, you really should change jobs again.

I don't follow you. That's about my situation, too. After good benefits (dental, health, 401K) and taxes, that's what I'm lookin' at, too.
posted by Miko at 1:04 PM on October 8, 2005

buybelen, you obviously don't live in New York, or you would be taking home a lot less.
posted by bingo at 2:38 PM on October 8, 2005

This could depend on several things. In most countries with progressive tax rates, you only pay the rate of the ammount you earn within each bracket. For example, here in Canada, nobody pays taxes on roughtly the first $10K of earnings, then a fixed percentage on the next $10K, then a higher fixed percentage on the next $15K, etc. However, there are (smallish) surtaxes that are enabled after you hit a certain amount of money and then there are similar situations in most provinces. So if you get a small raise that puts you over the surtax threshold, you could theoretically get less take home pay. Also, there is a maximum you can pay into your Canada Pension Plan (CPP, it's our government-operated pension), which I hit recently, so I saw my take home pay increase for the rest of the year. Maybe your new employer doesn't realize you hit something like this and you'll get the money come refund time? Hell, maybe your new job is unionized and they're taking your money?

Was you last employer matching private retirment contributions? They may have been doing the tax-deduction math for you. Are you in a different tax juristiction (province or state?). For simplification, here in canada provincial income taxes are collected by the feds. So you could be hitting a different provincial tax rate.

Do what everybody else here says, check your pay stub.

--
Posted by Heather Ann's boyfriend (she left her account logged in on my computer, hehehe)
posted by heatherann at 4:10 PM on October 8, 2005

OK, I'll explain my lame little joke. Obviously, bubelen meant that each paycheck was $1500, but he didn't say that. So I pretended to think he was talking about $1500 annual take-home pay, since he did say the gross pay was annual. Here:
. . . making around 45k a year Taking home roughly $1500 after taxes . . .
On my first reading, it did look like he was only bringing home $1500 a year.
posted by Kirth Gerson at 7:18 PM on October 8, 2005

I do suspect the two paychecks per month versus the paycheck every two weeks issue because:

$1,500 X 24 (paychecks at 2/month) = 36,000, or 80% of 45,000 (75-80 % of your gross is pretty common take home in these middle class income brackets).

$1,500 X 26 (paychecks at 1 every 2 weeks) = 39,000 or 78% of 50,000. It's pretty close.

Otherwise, to reiterate, the only way to determine what is going on is to review your pay stubs, determine everything that was/is being taken out of your gross per paycheck, and see what the difference is. It's possible you inadvertently increased the amount being withheld from your paycheck based on the number of withholding exemptions you claim.

Assuming all other things were equal, if you are receiving the same number of paychecks (let's assume both employers pay you twice monthly), you would expect your take-home to be

$50,000 X .8 (percent you should receive)/24 = $1,667. It's a pretty significant difference, some ten percent of your current net, so obviously it behooves you to figure it out.
posted by nanojath at 10:51 PM on October 8, 2005