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Taxation Rates

Taxation Rates

Old Jul 29th 2016, 1:52 pm
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Default Taxation Rates

Hi, I've had a scan of the forum and can't find anything on expected taxation rates, apologies if I have missed it.

I was wondering if anyone could recommend a simple website which I could work out the taxation I would face if I moved. A lot of people have commented on how less tax is paid in USA but the various websites I have looked at have not shown this and I'm not sure if I am inputting the correct data.

My basic details are;


just me and my wife possibly moving (no kids yet)
aged under 30 (doubt this makes a difference)
possibly relocating to N Carolina or Virginia
plan is to move with current company, wife would not have a job to start but may in the future
assumed I would have a company car, health insurance etc provided


All help appreciated.
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Old Jul 29th 2016, 2:24 pm
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Default Re: Taxation Rates

Originally Posted by cjgray87 View Post
Hi, I've had a scan of the forum and can't find anything on expected taxation rates, apologies if I have missed it.

I was wondering if anyone could recommend a simple website which I could work out the taxation I would face if I moved. A lot of people have commented on how less tax is paid in USA but the various websites I have looked at have not shown this and I'm not sure if I am inputting the correct data.

My basic details are;


just me and my wife possibly moving (no kids yet)
aged under 30 (doubt this makes a difference)
possibly relocating to N Carolina or Virginia
plan is to move with current company, wife would not have a job to start but may in the future
assumed I would have a company car, health insurance etc provided


All help appreciated.
As you've no doubt found, it'll depend very much on your salary and marginal rate of tax; elements like how much you pay into tax deductible retirement schemes also come into play. The usual advice is to assume that overall, you'll lose about 1/3 of your gross pay to federal, state and city taxes (it might be nearer 1/4, but better to plan for the worst). I find this website to be pretty accurate: http://www.tax-rates.org/income-tax-...or/?ref=banner

Company cars are virtually unknown over here, so I wouldn't necessarily assume that. And 'health insurance provided' doesn't mean it's paid for by your employer - your contribution is likely to be some hundreds a month for the premiums, and then some form of co-payments per visit or annual excess.

Last edited by kodokan; Jul 29th 2016 at 2:34 pm.
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Old Jul 29th 2016, 4:28 pm
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Default Re: Taxation Rates

try Yearly Federal Tax Calculator 2016/2017 | 2016 Tax Refund Calculator
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Old Jul 29th 2016, 4:40 pm
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Default Re: Taxation Rates

There are far too many variables to be able to come up with a meaningful estimate.

If you're on less than $100,000 you'll probably lose about 30% of your gross pay to mandatory state and federal deductions, if you gross over $200k it'll probably be about 35%.

You can reduce your tax liability if you max out your 401k, and IRA (both forms of private pension), but then you will have to live like a church mouse.

Companies rarely provide company cars in the US unless you actually need to drive a lot on business. ..... When income taxes were high in the 1970's British companies started giving cars as a perk to their employees - US companies started giving low cost health insurance at the same time for the same reason
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Old Jul 30th 2016, 1:50 am
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Default Re: Taxation Rates

We just had this thread in the Canada section so let me quote it:

I picked the number of USD$90,000 out of thin air and crunched the numbers on how much tax you would pay if you earned that much, i.e. including payroll taxes.

After taxes (single person) you would get:

Alberta: US$63,056 (assuming an exchange rate of 0.77)
UK: US$63,147 (assuming an exchange rate of 1.4)
US: $67,431 (not including State tax, which would apply in most States)


It is very hard doing comparisons because the exchange rate fluctuates, there are differences in credits you can claim and so on but generally speaking you will be paying the same or less in the US than you would in the UK. There are some exceptions, say you live in NYC.

It does depend on income levels a bit, where exactly you fall in the brackets.

The problem with the US is the healthcare situation, because most people pay a large chunk towards healthcare. Even if your employer has a healthcare plan (most do, as required by law) there are all sorts of co-pays, deductibles and so on. If you have a chronic condition, prescription costs are way higher in the US. Like, not three times as much, we're talking hugely more.

This makes comparisons difficult. This is a useful website: Cost Of Living Comparison
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Old Jul 30th 2016, 1:56 am
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Default Re: Taxation Rates

Originally Posted by Steve_ View Post
..... The problem with the US is the healthcare situation, because most people pay a large chunk towards healthcare. ....
If I include my health insurance premium AND my maximum contribution to my Health Savings Account (HSA), I still pay at least 5% less (I have calculated it at around 10% the past) in "mandatory deductions" in the US than I did in the UK. .... Any additional healthcare "expenses" are then covered by insurance or funded from my HSA.
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Old Jul 30th 2016, 2:38 am
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Default Re: Taxation Rates

When was the last time you worked that out? The Tories jacked up the starting point for the 40% band to 43,000.
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Old Jul 30th 2016, 3:11 am
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Default Re: Taxation Rates

Originally Posted by Steve_ View Post
When was the last time you worked that out? The Tories jacked up the starting point for the 40% band to 43,000.
Fairly recently, and that is one of the reasons why my "margin" has dropped from 10%ish to 5%ish.
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Old Aug 1st 2016, 2:35 pm
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Default Re: Taxation Rates

Originally Posted by Pulaski View Post
There are far too many variables to be able to come up with a meaningful estimate.

If you're on less than $100,000 you'll probably lose about 30% of your gross pay to mandatory state and federal deductions, if you gross over $200k it'll probably be about 35%.

You can reduce your tax liability if you max out your 401k, and IRA (both forms of private pension), but then you will have to live like a church mouse.

Companies rarely provide company cars in the US unless you actually need to drive a lot on business. ..... When income taxes were high in the 1970's British companies started giving cars as a perk to their employees - US companies started giving low cost health insurance at the same time for the same reason
Thanks for the info. I would be moving with a European company where company cars are standard so this will again be standard in USA. I'm not sure what the allowance would be.
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Old Aug 1st 2016, 2:47 pm
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Default Re: Taxation Rates

Originally Posted by cjgray87 View Post
Thanks for the info. I would be moving with a European company where company cars are standard so this will again be standard in USA. I'm not sure what the allowance would be.
It doesn't usually work like thst - hubby had a fully expensed (right down to all petrol for private use) car in Switzerland, because that was the norm there and had a special tax break. When the company moved him here, they just adjusted his salary to reflect that he now had to buy and run a car himself. I don't know anyone here who has a company car, across lots of multinationals.

Still, if your company is going to give you an allowance for some internal accounting reasons, it won't make any difference to your taxes. As far as I know, there's no tax deduction/ break for a company car, so that allowance amount will simply be considered salary and taxed like any other income. Perhaps it'll be accounted for differently for FICA; not sure how that works for benefits in kind like this.
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Old Aug 1st 2016, 2:51 pm
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Default Re: Taxation Rates

Originally Posted by kodokan View Post
It doesn't usually work like that ....
I agree.

An American might say, "the company provides healthcare for everyone, it'll be the same when they transfer me to the UK subsidiary.", except we all know it won't be.
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