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Non-immigration: W2 charges
- Thread starter mdh
- Start date
It is around 6-7% in terms of social security and medicare. They are called FICA. Both the employee and employer have to pay those. You can get the exact number by going to www.irs.gov or by doing math on your pay stub. Also the employer needs to pay unemployment insurance and workers compensation.
mdh masala:
i bet you are working as an independent consultant or are a wannabe.
Anyways, this time i will answer your query. Next time you have to research your self.
i am going to answer this since it will be helpful to a lot of people
and is a very common question.
Let us presume that your client pays your company 75$ per hour.
Also assume that you work 2000 hours per year(Roughly 166 hours per month)
a) Total earned is 75$ x 2000 hours = 150,000 $ per year.
b)Out of this ,your medical insurance averages roughly around 650$ per month for a family of 3(husband,wife and one kid).
it maybe less or more based on your situation.
Also dental is not being considered and the medical insurance is a good one witk maybe 10 or 15 $ co-pay.
So yearly cost for medical insurance= 650$ x 12 months = 8000$ (roughly)
c)Payroll taxes that employer has to pay for you = Social Security (6.2%) + Medicare (1.42%) = 7.62% of total payroll.
Plus he has to pay about 50 $ as unemployment taxes and another 50$ to payroll company every month.
Also you have to consider his infrastructure cost(read assistant for interacting with you and client etc.. for timesheets etc.
based on this i would consider 10% of your income as payroll taxes.
d) Your company's profit.
e) Your pay check.
a= b+c+d+e
which is
total payment from client = Medical Insurance costs + Payroll Taxes paid by employer + Your company's profit + Your paycheck.
Of Course your company will have to pay taxes on the profit it incurrs. Now how much taxes it will pay on that profit dependts on the company's profit and loss statement.
If it incurrs a loss , no taxes ahve to be paid, if it makes a huge profit, higher taxes might have tp be paid. Nothing to do with your income.
Also you will have to pay your share of the regular taxes from your paycheck which will include your portion of Social Security(6.2%) and Medicare Taxes(1.42%) + federal taxes+ State taxes.
Your fedearl and state taxes will again depend on what your earnings are for that year.
i hope you have been able to find your answer as to what is the cost component that your employer pays if you work as a W2 and that would be 10%(Payroll Taxes) + cost of medical Insurance for you)roughly 650 $ per month for a family of 3).
Hope this helps.
All the best and Happy Consulting!
i bet you are working as an independent consultant or are a wannabe.
Anyways, this time i will answer your query. Next time you have to research your self.
i am going to answer this since it will be helpful to a lot of people
and is a very common question.
Let us presume that your client pays your company 75$ per hour.
Also assume that you work 2000 hours per year(Roughly 166 hours per month)
a) Total earned is 75$ x 2000 hours = 150,000 $ per year.
b)Out of this ,your medical insurance averages roughly around 650$ per month for a family of 3(husband,wife and one kid).
it maybe less or more based on your situation.
Also dental is not being considered and the medical insurance is a good one witk maybe 10 or 15 $ co-pay.
So yearly cost for medical insurance= 650$ x 12 months = 8000$ (roughly)
c)Payroll taxes that employer has to pay for you = Social Security (6.2%) + Medicare (1.42%) = 7.62% of total payroll.
Plus he has to pay about 50 $ as unemployment taxes and another 50$ to payroll company every month.
Also you have to consider his infrastructure cost(read assistant for interacting with you and client etc.. for timesheets etc.
based on this i would consider 10% of your income as payroll taxes.
d) Your company's profit.
e) Your pay check.
a= b+c+d+e
which is
total payment from client = Medical Insurance costs + Payroll Taxes paid by employer + Your company's profit + Your paycheck.
Of Course your company will have to pay taxes on the profit it incurrs. Now how much taxes it will pay on that profit dependts on the company's profit and loss statement.
If it incurrs a loss , no taxes ahve to be paid, if it makes a huge profit, higher taxes might have tp be paid. Nothing to do with your income.
Also you will have to pay your share of the regular taxes from your paycheck which will include your portion of Social Security(6.2%) and Medicare Taxes(1.42%) + federal taxes+ State taxes.
Your fedearl and state taxes will again depend on what your earnings are for that year.
i hope you have been able to find your answer as to what is the cost component that your employer pays if you work as a W2 and that would be 10%(Payroll Taxes) + cost of medical Insurance for you)roughly 650 $ per month for a family of 3).
Hope this helps.
All the best and Happy Consulting!
Originally posted by mdh
Hi Guys,
If I work on W2 with a comany. How much % they have to pay to the govt as a tax? I heard it's only 10%. Can somebody explain?
Thanks
You can visit http://www.payroll-taxes.com, this site has a calculator to calculate your Federal and State Tax withholding per paycheck.
Hope this will help you.
Hope this will help you.
TheRealCanadian
Volunteer Moderator
Originally posted by mdh
Hi Guys,
If I work on W2 with a comany. How much % they have to pay to the govt as a tax? I heard it's only 10%. Can somebody explain?
Thanks
If you're on a W-2 as an employee, you'll be paying:
Federal tax: 15-28% depending on your income
State tax: 0-9% depending on your state
City tax: In rare cases (like NYC)
SS/Medicare (FICA): Around 7%
At the end of the day, assume around 25-33% of your income taken off, depending on your W-4 exemptions.
Re: Re: Non-immigration: W2 charges
What about other taxes like disability and unemployment?
Here is the break-up from my employer:
7.65% SS & Medicare
3% Unemployment & Disability
0.6% Fed Unemployment
1% workers comp
1.5% Life and Disability
1.5% Liability Insurance
1% Errors and Omissions
0.5% Misc
----
17.75% (apx 18%)
Appreciate your thoughts
Thanks
What about other taxes like disability and unemployment?
Here is the break-up from my employer:
7.65% SS & Medicare
3% Unemployment & Disability
0.6% Fed Unemployment
1% workers comp
1.5% Life and Disability
1.5% Liability Insurance
1% Errors and Omissions
0.5% Misc
----
17.75% (apx 18%)
Appreciate your thoughts
Thanks
TheRealCanadian
Volunteer Moderator
Re: Re: Re: Non-immigration: W2 charges
Depends on your state (UI is entirely employer-paid here in GA) and your level of benefits. E&O insurance isn't something I need or is even offerred.
You're also completely ommitting state & federal income tax.
Originally posted by mdh
What about other taxes like disability and unemployment?
Depends on your state (UI is entirely employer-paid here in GA) and your level of benefits. E&O insurance isn't something I need or is even offerred.
You're also completely ommitting state & federal income tax.
Re: Re: Re: Re: Non-immigration: W2 charges
My employer is going to cut these taxes from my gross hourly(cutting their profit from client's rate) rate. That's why Fed and State are not included. This is all to calculate my gross pay.
I just wanted to know which one are really valid and which one they really have to pay?
Thanks
My employer is going to cut these taxes from my gross hourly(cutting their profit from client's rate) rate. That's why Fed and State are not included. This is all to calculate my gross pay.
I just wanted to know which one are really valid and which one they really have to pay?
Thanks