I realize all that you say is true. I was trying to keep it simple for the sake of discussion with Fourpaw, who was making it sound like he doesn't pay 25% Federal because of his exemptions, which is simply not true (unless payroll was making a mistake, as I said).
He said: "I claim 9 exemptions and get almost the whole thing...around $7k." which can be very misleading for someone who doesn't understand how the system works. Even assuming no state taxes, a new hire will have 25% federal, SS, Medicare, uniforms, LTD, 401K (after 6 months)... But I was trying to eliminate all those variables, just using the bonus minus Federal (for him, $7,666; for a NH, $6,666)) to illustrate the fact that Fed withholding alone will be $1,916, leaving only $5,750 maximum possible. Based on individual tax situations, it will most likely be less.
Originally Posted by
higney85
25% federal (IRS rules), then SS and Medicare, state (if applicable), ALPA (2% for easy math), and 401k (if so selected). That's a simple way for anyone to run the numbers. The retentions don't reference W-2 selections. If you pay above a 25% federal, you would owe (in theory), and if under, it's a return (once again in theory). Either check with your tax advisor (if applicable) or use the government site to determine gross earnings with bonus for your W-2 calculations. Hopefully, it's a mute point with the stated negotiations in payrates for all who are currently on payroll. For those new or newly joining, alpa has sent an email spelling this out a few times now. If you figure 50% net, you will either hit the mark or be happily surprised. Don't spend it all in one place.