The $33,000 ?

[mlwear]

My sis teacher family and consumer science (aka home ec). She just asked me a ? that I bet someone here will know...
She is doing a project with the class to show them how much take home pay they will actually get.
She is working with a salary of $33,000. She asked me what I thought the amount deducted for taxes, FICA, etc would be...along with benefits like health insurance.
I know, little to go on. She must want very rough numbers. I'm guessing this is one person working without a family. State taxes would be for VA, but from her lack of information I guess any estimate will do. I'm guessing health insurance $50 a month (I really don't know)
Anyone care to take a stab at figuring this one out.

 

[Littlemotherhaywood]

Health insurance can be a small amount or a large amount depending on the company. I think here variables are too wide if you kwim? My dh certainly couldn't buy insurance from his company for an individual for that little. We're paying almost $400 for family coverage. Also, are they contributing to their 401K plan?

 

[formernyer]

My sis teacher family and consumer science (aka home ec). She just asked me a ? that I bet someone here will know...
She is doing a project with the class to show them how much take home pay they will actually get.
She is working with a salary of $33,000. She asked me what I thought the amount deducted for taxes, FICA, etc would be...along with benefits like health insurance.
I know, little to go on. She must want very rough numbers. I'm guessing this is one person working without a family. State taxes would be for VA, but from her lack of information I guess any estimate will do. I'm guessing health insurance $50 a month (I really don't know)
Anyone care to take a stab at figuring this one out.

This isn't something that you can really calculate with accuracy. Benefits and deductions differ vastly based on the company and the individual. There are so many variables, including number of withholding exemptions, filing status, state/local taxes, medical benefits, 401k/savings deductions, flexible spending accounts...the list goes on and on.

Your friend would probably be better off just working from her own personal paycheck and using those percentages as her example. She should also make it very clear that the amounts/percentages can fluctuate greatly from person to person. Some people take home 75% of their gross, while others take home only 35% of gross.

 

[Reflection]

Well here's my calculation based on the following assumptions:

Pay frequency: Biweekly
Filing status: Single
Tax rate: 28%
Pretax deductions for 401K (5% of gross annual salary) and health premium deductions of $50 each pay period
Exemptions: 1 (no other dependents)

Bi-weekly Gross Pay
$1,269.23
Federal Withholding
$125.00
Social Security
$71.66
Medicare
$16.76
Virginia
$48.00
Health insurance premium
$50.00
Retirement contribution
$63.46
Net Pay: $894.35

Total monthly net income: 1788.70

Depending on tax filing status, number of dependents, number of pre-tax deductions, this number could change.

 

[mlwear]

Right, NO WAY can this be accurate.
In fact, I think this is kind of a dumb school lesson. I think she is trying to get across to her class that they shouldn't expect to bring home a monthly check of $2750 because their salary is $33,000.
These are young high school kids, I think freshmen.
I wouldn't put 401K's or Flex spending into the equation.
She is just trying to give them a rough idea of what their actual take home pay could be.
I am going by this being a single person w/o a family. I'm guess $50/month insurance because I think I saw on DH's benefit renewal that for the employee only at his company is about that for the lowest amount. Of course, we too, as a family of four pay much more.

Anyone else want to give a rough guess of the figures.--Thanks Reflection

 

[mlwear]

Thanks. This is what I was looking for. I think we posted at the same time. Awesome.

Well here's my calculation based on the following assumptions:

Pay frequency: Biweekly
Filing status: Single
Tax rate: 28%
Pretax deductions for 401K (5% of gross annual salary) and health premium deductions of $50 each pay period
Exemptions: 1 (no other dependents)

Bi-weekly Gross Pay
$1,269.23
Federal Withholding
$125.00
Social Security
$71.66
Medicare
$16.76
Virginia
$48.00
Health insurance premium
$50.00
Retirement contribution
$63.46
Net Pay: $894.35

Total monthly net income: 1788.70

Depending on tax filing status, number of dependents, number of pre-tax deductions, this number could change.

 

[MyGoofy26]

Is she going to remind students of other expenses? Because even with all those coming out before you get a check, I think that most high school kids are still going to look at $1700+ and feel like they hit the lottery. I'm not sure that the "lesson" will truly sink in unless she find average housing costs for her area, the typical bills, groceries, transportation, etc and then shows them, "Out of that $1700 - this much will come out for all of these necessities" and shows them the REAL number they have to play with when all is said and done.

 

[tinker&belle]

I know this is a school project, but a good calculator is www.paycheckcity.com

 

[LisaNJ25]

Here are my calculations based on an old paycheck stub:

Bi-weekly
1339.08
medicare: $19
federal: 56.06
sui tax : 5.36
Social security:81.20
state tax 20.63
dental: $14.50
pension 72.00
medical 14.46
group insurance 7.25

Can give you an exact total because other deductions like pension loan, car insurance

 

[Danemom]

Is she going to remind students of other expenses? Because even with all those coming out before you get a check, I think that most high school kids are still going to look at $1700+ and feel like they hit the lottery. I'm not sure that the "lesson" will truly sink in unless she find average housing costs for her area, the typical bills, groceries, transportation, etc and then shows them, "Out of that $1700 - this much will come out for all of these necessities" and shows them the REAL number they have to play with when all is said and done.

I agree. I think she'll have to really show them "the real world" to make this work. $1700 a month sounds like a fortune to them, so she needs to show them that it's not!
Our local Junior Acheivement has a couple of programs they run. I did one with DD for 5th graders where they ran a city and learned about how everyone's job works and affects others. They also have one for teenagers - they let us tour it and explained a little. The kids had to create a budget. The JA lady said they'd had kids overspend on car payments and end up w/o enough for rent. They had to sleep in their fancy car. There are also "surprises" built in - like a car accident that costs them, etc. It sounded like a great program.

 

[canwegosoon]

I am certified in distributive ed (business classes) I use this...it is totally free and tons of stuff for her to do with kids(and keys and examples are provided)http://www.practicalmoneyskills.com/english/teachers/... She will love you !!!

 

[mlwear]

Is she going to remind students of other expenses? Because even with all those coming out before you get a check, I think that most high school kids are still going to look at $1700+ and feel like they hit the lottery. I'm not sure that the "lesson" will truly sink in unless she find average housing costs for her area, the typical bills, groceries, transportation, etc and then shows them, "Out of that $1700 - this much will come out for all of these necessities" and shows them the REAL number they have to play with when all is said and done.

I read her email again and the primary topic is find a place you will be able to live based on your income. She also sent me a list of all the household start-up supplies someone would need asking if I could think of others. Not sure if she is giving them a start up budget or not. (This could be very discouraging!) I have little info from her other than the request, but I've known her to do budget lessons before and she includes for living expenses. I think the gross vs. net is something new she is adding, which is good. Now, add in for those unexpected emergencies.
As I'm thinking of it, it would be kind of a neat if she could do something like this for a semester long project. See if they can manage. Let them get that unexpected car repair bill. Maybe add in a few credit card bills--maybe THAT would help some of the kids to not get themselves into a mess in college...

 

[mlwear]

Thank you so much
I have passed the information along to her. She is very grateful and I think quite surprised that I was able to get it so quickly
The websites are fantastic!

 

[formernyer]

As I'm thinking of it, it would be kind of a neat if she could do something like this for a semester long project. See if they can manage. Let them get that unexpected car repair bill. Maybe add in a few credit card bills--maybe THAT would help some of the kids to not get themselves into a mess in college...

I agree with you on this. I've been saying for years that a required High School course should be Personal Money Management. The course would start with things as simple as how to write out a check, pay a bill, and balance a checkbook. The course would also cover budgeting and making sound financial decisions (e.g., understanding mortgages, credit cards, and other debt and determining when to use debt). Your idea about the semester-long project would be perfect. I fully agree with throwing in occasional curve balls, like the car repair, so that the kids can see that sometimes unanticipated expenses arise; however, I don't agree with adding in credit card bills. I think that's something that the kids would have to choose to use or not use throughout the course of the semester, but it sets a bad example to start them out in the hole with credit card debt. The idea is to try to teach them to manage their funds in such a way that they hopefully won't get caught up in consumer debt at all.

 

[MeggerasMa]

LOL! Just want to says thanks to the original poster and all the others, especially those who posted links. Sometimes true life mimics these "supposed" scenarios! This info was just so timely...

 

[MyGoofy26]

I read her email again and the primary topic is find a place you will be able to live based on your income. She also sent me a list of all the household start-up supplies someone would need asking if I could think of others. Not sure if she is giving them a start up budget or not. (This could be very discouraging!) I have little info from her other than the request, but I've known her to do budget lessons before and she includes for living expenses. I think the gross vs. net is something new she is adding, which is good. Now, add in for those unexpected emergencies.
As I'm thinking of it, it would be kind of a neat if she could do something like this for a semester long project. See if they can manage. Let them get that unexpected car repair bill. Maybe add in a few credit card bills--maybe THAT would help some of the kids to not get themselves into a mess in college...

It'd make a great extended project! She could start out the semester with all sorts of options, maybe pictures of different types of houses/apartments, different types of cars, and all those little extras and let the students choose what they think they need to have and can afford. Then throw in all those little bumps in the road - car repairs, home repairs, hospital bill and let the students see who ends up with the most money "left over" at the end of the semester and who ends up in the negative.

 

[mlwear]

I agree with you on this. I've been saying for years that a required High School course should be Personal Money Management. The course would start with things as simple as how to write out a check, pay a bill, and balance a checkbook. The course would also cover budgeting and making sound financial decisions (e.g., understanding mortgages, credit cards, and other debt and determining when to use debt). Your idea about the semester-long project would be perfect. I fully agree with throwing in occasional curve balls, like the car repair, so that the kids can see that sometimes unanticipated expenses arise; however, I don't agree with adding in credit card bills. I think that's something that the kids would have to choose to use or not use throughout the course of the semester, but it sets a bad example to start them out in the hole with credit card debt. The idea is to try to teach them to manage their funds in such a way that they hopefully won't get caught up in consumer debt at all.

I see what you are saying about the CC's. I guess what I had in mind would be hard to implement and may take longer than a semester for them to feel the real effects. I just know so many kids go to college and get credit cards seeing it as "free money" but then have trouble making the payments, are late with payments and charged fees, have no idea how much they are paying in interest, etc. I wish they could have a fake practice run at it before they sign up for that Visa card in the dorm lobby to get a free 2 liter of soda, y'know?

 

[Danemom]

I think one way she could do this and show the effects of cc debt if she doesn't want to make it a semester long experiment would be to have the kids draw a scenario, where some of them would be graduating college with large cc debt, some with average cc debt, others with none. Maybe the same with students loans? I think it would be interesting and they would get to see how all those "extras" on the cc during college will affect the rest of their life.
I completely agree that a basic finance class should be a requirement for graduation.

 

[dcfromva]

mlwear,
It is so nice of you to help your sister out. Here are some links for you, too:

Link to IRS withholding calculator

Virginia Tax tables I think it is around 3-4% withholding for married, 1 exemption. I can't put my hands on a good calculator.


FICA (Federal Insurance Contributions Act) includes Social Security deductions and Medicare withholding. Sometimes, it is listed separate, sometimes combined:
Currently, Social Security withholding is 6.2% of wages (up to $94,200). (The employer makes a matching contribution of an equal amount.) Medicare withholding is 1.45% your wages (without limit).

Health Insurance varies quite a bit from company to company. Some employers pick up the entire cost. This seems to be pretty rare, these days. On the other hand, some employees pick up the lions share of the costs--which could amount to several hundred dollars per pay period. This might be an interesting poll topic to see what the average amount per pay period everyone pays for health insurance.

I hope your sister might touch on the power of investing for retirement from day 1. ( If not 10-15% of income, saving something on a consistant and automatic basis for retirement). I think the kids who are coming up are going to have even more of a challenge in their retirements because it does seem like pensions are becoming more or more rare.

-DC

 

[KnoxDisney]

I am a business education teacher in Knoxville, Tennessee. I teach Business Principles. We go over all the personal money management info. The website "practical money..." is excellent. I have used it for several lessons.

I am finishing up the school year with budgeting. I have told my kids that in general 20% of their salary will go to taxes if they are single. Insurance is roughly $150. I have a form that breaks down the expenses which is pretty realistic. I have students draw for a salary and they must complete a budget with their selected salary. They have to shop for a car, apartment, insurance, etc... They really like the assignment. However, can you believe I had a student get upset with me because he drew a salary of $18,000?! Yes, believe it.

Sorry, this is a rambling email, but I am grading and reading at the same time.

Good luck!