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How to calculate take home pay?

How to calculate take home pay?

Old Feb 15th 2024, 8:56 pm
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Default How to calculate take home pay?

My company is putting together a package to move to NYC later this year on an L1A. I'm trying to budget and figure out living costs, rent, school (2 & 4 yo), general expenses etc. and finding it hard without knowing take home pay. Any advice for calculating this to some level of accuracy? I've been through a few threads, but haven't been able to find anything quite right.
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Old Feb 15th 2024, 9:56 pm
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Default Re: How to calculate take home pay?

Originally Posted by randomtimes
My company is putting together a package to move to NYC later this year on an L1A. I'm trying to budget and figure out living costs, rent, school (2 & 4 yo), general expenses etc. and finding it hard without knowing take home pay. Any advice for calculating this to some level of accuracy? I've been through a few threads, but haven't been able to find anything quite right.
it’s hard to calculate because you have to have all your own information in terms of deductions, it’s not just your W2 and once resident you are subject to tax on your worldwide income, not just US (it’s not remittance based like the UK if that’s where your moving from).

You should be able to work out the cost without knowing your income… but in terms of figuring that out there are online calculators. For NYC you have to factor federal, state and nyc city tax

At 2 you are talking daycare not school… get ready for a shock on the price of that… your single biggest expense will be rent… so I would focus on where you want to live / what commute you want first. I loved living in the city before I had kids, now the burbs work a lot better for me.

I moved on an L1a, 14 years ago, now a USC, tax’s here in general are lower at higher levels once all the deductions are factored in, but some costs are way higher.
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Old Feb 15th 2024, 10:03 pm
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Default Re: How to calculate take home pay?

It will depend also on how much you have to pay for health insurance premiums, how much you contribute to a 401K, those types of things.

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Old Feb 16th 2024, 6:24 am
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Default Re: How to calculate take home pay?

Originally Posted by tht
it’s hard to calculate because you have to have all your own information in terms of deductions, it’s not just your W2 and once resident you are subject to tax on your worldwide income, not just US (it’s not remittance based like the UK if that’s where your moving from).

You should be able to work out the cost without knowing your income… but in terms of figuring that out there are online calculators. For NYC you have to factor federal, state and nyc city tax

At 2 you are talking daycare not school… get ready for a shock on the price of that… your single biggest expense will be rent… so I would focus on where you want to live / what commute you want first. I loved living in the city before I had kids, now the burbs work a lot better for me.

I moved on an L1a, 14 years ago, now a USC, tax’s here in general are lower at higher levels once all the deductions are factored in, but some costs are way higher.
Thank you for the insight. To give a little more detail, the move is initially for a year and I don't expect to personally have any UK income. However, my wife is self-employed and will likely still be earning from some work in the UK while picking up work locally once we've moved. I understand that she can work if I have an L1A and that income is taxed as a household?

Yes... I've started to see that childcare/school is going to be the biggest cost after rent!

Location wise, we don't want to live out in the suburbs for this year and experience the city. The office is near Penn Station, and we we've been looking the Upper West Side or Williamsburg for places to live as I hear they have family friendly areas. I do appreciate that this comes at a premium though.

I suppose what I'm trying to figure out is when the offer comes through, whether we can afford our preferred lifestyle, otherwise it's maybe not worth making the move.

Originally Posted by Noorah101
It will depend also on how much you have to pay for health insurance premiums, how much you contribute to a 401K, those types of things.

Rene
Health insurance is covered by work and is generous, is there any tax on that? I believe in the US that benefits aren't taxable like they are in the UK. As above, we're going for a year to begin with. Are 401k contributions compulsory? If we went back after a year, what would I do with that if I never going back to the US?

Trying not to be too naive here!
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Old Feb 16th 2024, 2:27 pm
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Default Re: How to calculate take home pay?

As other said - it will be rough due to individual complexities but I suggest https://smartasset.com/taxes/new-york-tax-calculator as a good starting point. It should give you an indication. Accounting for state, city taxes and insurance premiums my tax burden is v similar to what it was in the UK.
Healthcare is the other way around - it will be tax deductible not a benefit in kind. Generally you pay something from your pretax income (equivalent to salary sacrifice) for medical, dental and vision. I guess it's possible a generous company could pay 100% but usually the employee pays some premiums too. This also does not mean that all your healthcare will then be free/covered by insurance. Generally there are copays etc. depending on the coverage. Hopefully they will share with you all the details or you can ask colleagues in the NY office.

401ks are not compulsory. They are tax deferred like a UK pension so can be good, but if you're only here for 1 year you might want to save the hassle.
Likewise if you have other investments in funds, you'll need to sell those before moving. Check the forum/web for PFIC, several posters here are very knowledgeable.

My high-level guidance is that you'll want to double your UK income then put a dollar sign on it to have approximately similar living standards. e.g. £100k -> $200k.
You can find rent online (NYC uses StreetEasy), and same for childcare (pre-school or pre-K).
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Old Feb 20th 2024, 5:39 pm
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Default Re: How to calculate take home pay?

Originally Posted by randomtimes
Thank you for the insight. To give a little more detail, the move is initially for a year and I don't expect to personally have any UK income. However, my wife is self-employed and will likely still be earning from some work in the UK while picking up work locally once we've moved. I understand that she can work if I have an L1A and that income is taxed as a household?

Yes... I've started to see that childcare/school is going to be the biggest cost after rent!

Location wise, we don't want to live out in the suburbs for this year and experience the city. The office is near Penn Station, and we we've been looking the Upper West Side or Williamsburg for places to live as I hear they have family friendly areas. I do appreciate that this comes at a premium though.

I suppose what I'm trying to figure out is when the offer comes through, whether we can afford our preferred lifestyle, otherwise it's maybe not worth making the move.



Health insurance is covered by work and is generous, is there any tax on that? I believe in the US that benefits aren't taxable like they are in the UK. As above, we're going for a year to begin with. Are 401k contributions compulsory? If we went back after a year, what would I do with that if I never going back to the US?

Trying not to be too naive here!
yes Married filling joint allows you to be taxed as a household, which can change the childcare equation.

we lived in Williamsburg when our first son was born, we had a nanny, it would have been much cheaper in the short term to have the Mrs stay at home, but we took the hit for the long term benefit of her career. We had a car when we lived there which was helpful, but lots of things are walkable there.

When you are ruining your numbers I think the hard part will be if you are only coming short term you will have lots of setup costs, setting up a family of 4 won’t be cheap, I think a minimum of 3 years (with a written GC option) would be my cutoff for such a big change with a family). And assuming you have property and or investments in the UK you need to understand the potential impacts of becoming a US tax resident… this covers your worldwide income and assets… read some FBAR and selling foreign property threads on here to get an idea of what’s involved…

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