Howefamily

Can someone tell if its possible to give an estimate of how much you lose in payroll taxes each pay (standard deductions, not private plans)? Is it 30% roughly, higher or lower etc etc and what payroll deductions are typically made and what are they for.






I am wondering because in Canada I lose about 30% of my biweekly salary to :
Tax - federal and provincial, Canada pension plan and Workers comp.


Obviously in the UK we lose it to tax, NI and any private deductions (as far as I remember)


Thanks all

hungryhorace

My income tax deductions result in a tax rate of 25% for my pay. My deductions (ie, healthcare) result in a 3% deduction.

My deductions are:
Employee Med
Dependent Med
Employee D/V
Dependent D/V

My marginal rate at the end of the tax year is ~15% after deductions. It's an insane system that benefits the wealthiest in society, and penalises the poorest IMO.

Pulaski

Also about 30% in my experience, if you include health insurance and tax deductible contributions to an HSA. Mandatory taxes and nothing else only takes 24%. You lose money to federal, state, and sometimes city income taxes, and social security contributions (equiv to NI).

Obviously the tax deductions depend on your income level, and are quite low if you earn less than $50k. It is also going to vary significantly between states; I live in a relatively low tax state.

Howefamily

thanks :-)

Pulaski

Do you mean "marginal", or "average"?

My average rate is similar to your "marginal" rate, but my marginal rate is much higher than that number.

Howefamily

does that include deductions for Obamacare?

Pulaski

You mean the "Affordable Care Act" aka "ACA".

I have insurance for me and my daughter through my employer (my wife has insurance through her employer), as I referred to in my previous post. My health insurance is ACA compliant (meets the ACA rules), but was not obtained through a public insurance exchange. If I had to buy insurance through an exchange it would likely take an additional 10% of my gross pay.

tom169

Howefamily

I do mean that.. Arnt they one and the same thing?
So the 30% deductions - does that include ACA?


The reason I am asking is becuase I find the cost per month of ACA high and my neighbour pointed out that all the yanks should stop whining as we pay more for our "free" healthcare in our tax deductions than ACA would cost. I dont believe that would be true... but I dont have a scooby doo frankly

hungryhorace

Turbo Tax says it's my 'effective tax rate', so average. Apologies for the confusion.

Howefamily

They were laughing about this very clip on the radio yesterday morning

Pulaski

My previous post answers all your questions. ..... I have health insurance, which is ACA compliant, it was not purchased through a public ACA exchange.

The media dubbed the ACA "Obamacare", thinking that they were helping cement President Obama's place in history, but using that name for ACA insurance is nothing more than political BS!

I worked out, when I first came from the UK, that my mandatory deductions (all government-required deductions from my gross salary) amounted to about 35%. In the US, if I include health insurance and HSA contributions as a "mandatory" deduction, it drops (current figure) to about 30% (was only about 25% like-for-like when I moved over - the percentage has increased over the years as more of my income is taxed higher rates). In other words, your neighbour is right - you pay more in taxes to enjoy your "free" healthcare.

rpjs

Live in NYC suburbs, work in the city. My deductions amount to 35% of gross, but as well as tax, disability, 401k etc that includes voluntary deductions such as funding my commuter benefits card.

I am in a high-tax state and my salary and therefore income tax rate is on the high side. We also take no deductions from our withholding. This does mean we give Uncle Sam an interest-free loan each paycheck, but we'd rather get a refund than find we're on the hook to the IRS for a few $$ more this time of year.

If you budget to expect 30-35% in deductions you shouldn't go too far wrong.

rpjs

Of course for all we know they talked to, but didn't show, dozens of people who know that Obamacare is the ACA...

...though sadly, I doubt it.

md95065

I'd rather end up owing the IRS as much as possible without penalties and make them wait until April for the money ...