When we join an organization, we are given a CTC figure or Fixed Income figure. This is what people usually year by offering their services to the company. Now, people who haven’t worked earlier in their lifetime are up for a rude shock when they check their first pay slip. There is usually a lot of difference in the money that they get monthly after the taxes. If you are working in USA and if you are making $50,000 then you might also be thinking how much a month you will make after the tax deductions.
Well, the taxes differ from one state to another and hence there will be a slight discrepancy in the amount depending on the state you live in. Let us portray the figures by assuming that you work in the Silicon Valley. Since we assumed that you are going to work in Silicon Valley, all the calculations are based on the tax rates applicable in California.
You will be paying for Medicare tax, social security, federal income tax and state income tax while you are working in California. You can refer to the table below to get an idea of the taxes.
|Total Earnings||$ 50,000|
|Income Tax- Federal||($ 4,342)|
|Income Tax – State||($ 1,512)|
|Social Security||($ 3,100)|
|Total Deductions||($ 9,679)|
|Earnings After Tax||$ 40,321|
By looking at the table above, you would have understood the various taxes you will be paying. If you factor in all these taxes, then you are left with an annual amount of $ 40,321. It should be noted that if you divide this amount by 12, you will get $ 3,360. This amount that you get after dividing the earnings after tax is the answer you are looking for.
These figures you have given you a fair idea of how much disposable income will be available in your hand after every month. Now, you can plan other expenses depending on these numbers. You will be able to plan your mortgage and your other expenses too. Remember to account for your savings here and do not think about missing on your savings. The savings can prove to be very important in case of any emergency. Avoid splurging too much by being depend on any line of credit.
As mentioned earlier, the tax rate varies from one state to another. The lowest tag rates are in Wyoming followed by Florida & Nevada. The highest tax rates are in Oregon & Hawaii. You will be able to get a better idea about the tax and monthly salary once you are clear about the state that you are going to work in. We also recommend you to opt for the investment management solutions so that you can invest your money properly and save for future needs. If you still have any questions then you can reach out to us and we will be able to offer you some help or guidance.