Today is payday and normally a day I do a little happy dance (well, not an actual one dance but it is why I sit at a desk for 40 hours a week). But have you ever looked at the gross amount amount of your paycheck and compared it to your net amount felt immediate depression? Yup, that happens to me. I am not raking in the money but I make a livable wage. Unfortunately after all of the deductions are taken out I am left with such a small amount that it is really kinda sad. Without giving you the exact dollar amount of all of my hard work, here is a breakdown of things based on percentage of gross.
Federal Income Tax: 4.8%
Social Security Tax: 5.4%
Medicare Tax: 1.3%
State Income Tax: 1.7%
Long Term Disability*: 1.2%
Health Savings: 7.7%
Yup, almost half of my pay is gone before I even see it. Arguably some if this is by choice. I choose to put 20% into my 401(k) and I choose to put money in my HSA every paycheck. The amounts for these are fully my decision. The rest of the deductions though I have little or no choice. When Mr. SFF lost his job last year we started going through my employer for our health care. We chose the least expensive plan with a huge $10,000 deductible. My payment is significantly less than what it could be but we are at more risk which is why I am also contributing to my HSA. This is a gamble we were willing to take because my hope is that we can keep our out of pocket costs to a minimum so that my HSA balance can grow.
When I calculate my monthly savings percentages from my net paycheck I am not working with a lot of money to start with so I am happy when I can keep this percentage above 40%. If only I were working with larger numbers to start with this would be a whole lot easier. But I would rather have a flexible job where I am not miserable making OK money then working insane hours for a slave-driving boss. So for now I am doing my best with what I have available.
* Up until last month the long term disability coverage was an employer paid benefit. My employer recently made a change so I pay the premium making any potential benefits received at the time of a disability fully tax free.