Bonus calculation

I was supposed to get a bonus for $10k.  But only about $4850 arrived in my checking account, so I’m wondering if their calculation was based on something less than $10k.  I don’t have the pay stub with me.  But let’s try to back calculate everything.

$149,000 into 24 pay periods = $6208.33

Regular take home pay = $3910.09.  Regular tax rate = 0.62981349251.  About 37% (ignoring property tax, sales tax, etc.).

Most recent paycheck: $8760.36.  Difference beyond normal paycheck $4850.27.  I expected more like $6298.13.

On $10k, $4850 paycheck is a taxation rate of 52%!  Fuck that.  If I assume I was taxed at the same rate before, the initial amount is only about $7700, not $10,000.  UGH.

Let’s look at bonus taxation rates.  Oops!  They are taxed higher than salary income.  fml.

Bonus Time: How Bonuses Are Taxed and Treated by the IRS

Paycheck calculator gives me:

Your Pay Check Results
Bonus $10,000.00
Federal Withholding $2,500.00
Social Security $620.00
Medicare $145.00
California $1,023.00
CA SDI $90.00
Net Pay $5,622.00
Calculation Based On
Tax Year 2016
Bonus $10,000.00
Federal Filing Status Supplemental
Additional Federal W/H $0.00
State California
Filing status Supplemental 10.23%
Additional State W/H $0.00

So it’s definitely higher than my normal tax rate, but there’s still an $800 difference in this and what I got.  Many states have no extra tax on bonuses.  Also, I learned California will charge 10.23% on earnings from stock options.  Note to self:  leave the state before cashing out stock options.

When you’re being taxed at 50%, calculating any expenditure as a percentage of your income is meaningless. The only thing that means something is calculating it as a percent of take home pay.  Everything is 2X as expensive.

Still, can’t complain that much.  Need to be conservative on this next trip to Florida so I can keep making serious progress through the second half of the year.

Screen Shot 2016-07-15 at 10.24.03 AM.png


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s