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Closer to 8% for SS & Medicare. Also, you'll typically have deductions taken out of bonuses for your 401(k) and ESPP contributions (maybe another 20-25%). Tec
by kscaldef 16y ago
Closer to 8% for SS & Medicare. Also, you'll typically have deductions taken out of bonuses for your 401(k) and ESPP contributions (maybe another 20-25%). Technically, those are still your money; and ESPP will come back to you before too long, but the psychological impact of opening up your paycheck and only seeing 30-40% of the gross you were told was your bonus is pretty frustrating.
- mturmon 16y agoMost of those people would hopefully be above the social security threshold of around $100K/year so that would not apply. I think a marginal tax rate of more like 30-40% is more accurate.
- kscaldef 16y agoIt depends on when in the year the bonus is delivered. If it's early in the year, it doesn't matter if you're going to hit the Social Security ceiling eventually, they take it out of your bonus. I speak from personal experience both on this matter, and on my previous accounting of only 30-40% of bonuses actually hitting my bank account.