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I joined Tiger Analytics with CTC of 9lpa. When I check in greythr IT statement, it shows 7.14lpa.
In the CTC payslip, it shows 75k per month as my salary. But this month I got 61k.
I understand they deduct tax, but I feel it is too much. IDK where I'm losing the money. Can someone tell if this is normal. I'm a fresher so, IDK much about it.
Also, what can I do to pay less taxes? Any help on that?
OP: please understand that the amount you pay in taxes based on your pay stubs is usually not how much you end up paying at the end of the year. You can use smartasset.com to get a generic view of how much you fully owe at the end of the year based on your location but it still doesnt take into account deductions and credits that are handled when filing taxes.
I only used my pay stub to calculate how much I paid in payroll taxes. I had a CPA do my income taxes and used those numbers in calculating taxes paid for income.
Mentor
OP - is 185 your net earnings or gross earnings? I see you said 37% is net income (which is 68.5/185). Tax rate should be taken off gross earnings. If you put the taxes paid in the numerator but not the denominator, you’re getting a ratio that doesn’t mean anything useful. It’s saying for every $1 in taxes, you keep $2.7. Really, tax rate is taxes paid over gross pay (before taking out 401k, HSA, etc.). For example, last year my gross pay was 190 and I paid 59 after filing (IL). My effective rate all in is 31%. If 185 is gross pay, I’d expect you got a bunch back when you filed taxes.
IBA, how?
How do you make that much as an associate?
Several strategy firms and IBs also have associate as the post MBA title and starting base salary is typically 160K+
Mentor
Yikes. That doesn’t seem right.
Coach
Does seem high.
I also wouldn’t include FICA taxes, since you will likely get more back than you put in over time.
Why do you think people get more back than they pay in? That’s generally not true unless: 1) low income; 2) people who outlive expected life spans significantly.
Someone who is making 190k early career is very likely to pass the second bend point at which point you expect about 30% of taxes paid in increased benefits.
I live in CA, so I have the highest state income tax. Paid about $13.5K in state income tax.
Yeah something's off. We're in NYC. HHI of $250k and paid $45k in federal. I don't have the state and city tax offhand, though.
It should say on your pay stubs how much you’ve paid in taxes YTD. At least it does on mine. My calculations show that it’s an egregiously large sum of money.
The amount you pay based on pay stubs is not usually how much you end up paying at the end of the year....
Yeah seems high OP - where do you live? I’m about the same comp-wise and pay ~26% or so last I checked... is that even with contributing to tax-deductible vehicles (401k, Roth IRA, HSA, etc.)? Bc if you’re not using those, then that’s a good place to start!
This is after maxing 401K and HSA. I’m in CA.
Seems a bit high... what state are you in? I make 200k in nyc and I paid around 52k total.
Is that 68.5k actual cash tax you paid or your calculation based on theoretical percentages? For ex. You dont pay social security tax above 130k ish so shouldnt apply the full fica rate to your 185
Actually what I did was look at my end of year pay stub for payroll taxes, so pretty sure I got them right. Are you sure $52K is right?
OP is your salary your only source of income?
Yes.
Mentor
I don’t bother because I know my federal income tax is less than 20% effective - last time I checked it was less than 15%, and I live in a state without income tax
It seems like you’re missing out on some deductions or exemptions. I’ve lived in CA and MA over the past 5 years and my effective tax rate has been consistently between 16-19%; ~23% including state taxes in 2019
My effective fed rate was 20% and state was 7.5%. I had a CPA do my taxes...and I don’t really have a complicated return. I’m single with no property. What could he have missed?
Sorry but this doesn’t pass the sniff test. I make over 250 and have an effective rate of around 22% and I’m not in a state with no SALT. I think you need to review your math and understand how to calculate effective rate.
I don’t think you understand what I’m saying in my post. I’m just pointing out total taxes paid (income plus payroll). I’m not saying 37% is my tax rate.
For another datapoint for 2019:
300k HHI, married
52k federal income
12k state income
~17k total payroll
So a bit above 80k total or 27% or so
Two people hitting max social security = 13k or so plus 4k Medicare.
If just w2 income, do you guys use a CPA or turbo tax? I just used turbo tax for many years.
I used CPA who is good. I don’t think people understand that I added my total income taxes paid to the total amount paid in payroll taxes. Usually people only look at income tax. I also live in CA with highest state income tax.
I also had a typo. I paid $63.5K total, not $68.5K.