net payWhen taking a job, many employees often have important questions they want answered. Employees may want to know what work hours they will maintain, who they must report to in case of a problem and what holidays they are given off. One of the most important questions many employees have is regarding their pay. In general, employees can expect two kinds of pay: gross and net. Net pay is the person’s take home pay. Multiple factors will influence an employee’s take home pay. Any employee should be aware of what specifics may influence the amount of money they bring home each payday.

Many Types of Taxes

One of the most important things that will determine how an employee’s paycheck after taxes are the amount of taxes they pay. Taxes vary from place to place. In general, there are several kinds of taxes most people pay. Federal taxes are taxes paid to the federal government. State taxes go to the state. An employee may also pay local and city taxes. These taxes may depend on the job’s location. Commuters from a different state may pay commuting taxes. It’s a good idea to ask an employer what taxes apply to them when taking the job.

Deductions Are Also a Factor

Another factor that can influence the amount of money a person earns after taxes are the deductions they take. Some people take lots of deductions while others may take only a few. It’s a good idea to be on the same page with a working spouse when it comes to determining which deductions to take. Each partner may want to decide which specific deductions they want to take in order to maximize the money they bring home and reduce their overall taxes.

Paying For Things

The amount of money in any check may also be determined by other specific factors as well. For example, while most companies offer their employees health insurance, the employee may still have to pay for a portion of the insurance costs. Such costs may be deducted from the employee’s paycheck before they are paid. Some employees may opt for a family health insurance plan that covers all of their family members. In that case, they may have a smaller paycheck after taxes than an employee who only needs to cover a single person. An employee may also need to pay other expenses directly from their paycheck. For example, a divorced dad may need to pay child support to an ex-spouse. In many instances, such payments are mandated by the court system and taken directly out of the employee’s paycheck.

Retirement Planning

Many employees opt to save at least a portion of their pay each paycheck and put it into a personal retirement account. An employee may decide to put aside a certain percentage of funds each week in order to help them save for retirement. Such funds are typically taken out of the employee’s paycheck before the employee sees the final check. This is a good way to save for retirement. Some companies even match an employee’s savings up to a certain amount from each paycheck. Saving for retirement this way also has great tax advantages. Consult with your employer and find out how much you can contribute each pay period.


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