4 ms·
If you base the rule on net income instead of gross income, you'd need 200k per year to afford it properly. Assumption: 40% is the federal + NY state + NY city
by billpaetzke 11y ago
If you base the rule on net income instead of gross income, you'd need 200k per year to afford it properly.
Assumption: 40% is the federal + NY state + NY city income tax for a six-figure earner
200K * 0.60 = 120k of net income = 10k/month net income
3k rent / 10k monthly net income = 30% of net income
- pc86 11y agoFor what it's worth I've always heard it as 30% of your gross pay, not net.
- emergentcypher 11y agoI don't know why. It just adds a level of indirection. Comparing anything with gross pay is pretty meaningless.
- guiambros 11y agoQuite the opposite. Comparing anything with net pay is pretty pointless. Your total tax rate depends on many factors: total household income, number of kids, deductibles, filling jointly or separately, etc. Plus, the exact amount varies over the year, depending on how much you've already contributed in sales and federal taxes. On the other hand, gross pay is a single, round, fixed number. I understand this may sound a weird concept for people in some countries outside the US, but it's a much simpler concept once you get used to it.
- pc86 11y agoTo continue off of what guiambros said, unless you get no refund or bill come tax time every April, you don't know what your net pay is until Q2 of the following year.