My Paycheck Exposed - Expert Edition Episode 60

Today, I’m going to talk about something really interesting—my paycheck! I recently shared how much money I make before and after taxes, and lots of people had big reactions. I want to show you how taxes work and explain why I don’t actually pay as much as it seems. I’ll share some funny comments from people who saw my post, and we'll look at my recent pay stubs together. It’s going to be fun and you’ll learn how money can look different once taxes and other things are taken out.

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TRANSCRIPT:

Naseema: [00:00:00] What's up? My financially intentional people. So I shared this post of how much I bring home on a monthly basis. Gross and net and the responses I've gotten. First of all, we're pretty shocking. Actually. I'm not really surprised by much these days, especially when you post on social media, like how people react.

But I wanted to use this as a lesson to talk about how. payroll works, how payroll taxes work how taxes in general works and to remind people that America has a progressive tax system. Yeah, I'm going to share my recent pay stubs. I'm going to share a couple of caveats that go along with that.

And I think it's just hilarious. But it'll give you an opportunity to Get to know You know what my pay looks like how it's broken down And also how much I actually pay for taxes And then next week i'll talk [00:01:00] about my cost of living in the san francisco bay area And how much I spend on things y'all know I spend a grip on.

Daycare, but we're going to break that down even more next week. Yeah, so this is the post that I shared in regards to how much I get paid gross versus what I take home. And the comments were wild. I'm going to try to read some of them and if you're not watching this on YouTube, this is a great time to watch this episode on YouTube.

Because it's a visual one. So the comments I'm going to read some of them. It says the IRS will have to come and find me. I'm going to work hard and make 30, 000 for them to leave me with 14. Nah, 14 take home from 30 casings illegal. The U S really be FNS over our government is robbing us blind and we are letting them how the F they take more than half.[00:02:00]

And. Heh heh heh. And I don't know what this and I be she gonna pay. I don't know what that means. But anyway, 50 percent in taxes question marks explanation point.

Oh, no. The government is out here robbing us in taxes. Damn girl. So happy for you though. Why you pay half in taxes? You better. Tax play, while you pay half in taxes, you need a better tax plan. Damn, that's a lot of taxes. That's a lot of taxes or something for, for a take home after gross.

Stealing more than 50 percent of the income should be illegal. Taxes are out of control. That tax, Cali tax hit different. Anyway. I thought those were hilarious, so I just wanted to share some of those, [00:03:00] but, the amount of people that didn't even read the 1st sentence was baffling to me. I know people don't read captions, but like, when you see something like that, and, it seems oh, my God that's crazy.

The 1st place I go to is the captions or the comments. I'm always trying to learn something and dive in deeper, but I'm definitely not I'm going to make a comment until I have a little bit more context, but people are out here, bold and loud and wrong. The 1st sentence of my caption says, that's after maxing my 403b and 457 taxes, insurance and duels.

It tells you it's just not taxes, but you know what? People don't think what they don't think. But anyway, I just wanted to remind you guys that we are on a progressive tax system in the United States. The most I could ever get taxed with how much I pay is 32 percent and that's only on the 32 percent of if I make over [00:04:00] 182, 000 dollars after tax. So it's a progressive tax system. So the way it works is. Say, I made 200, 000 dollars, right? So whatever that 18, 000 dollars I would get paid. I would get taxed 32 percent on that 18, 000 dollars. That's how it works.

It's, it's not a 32 percent across the board and people just don't understand that. I guess it's a hard concept, but hopefully my girl can make a post about progressive taxes and how that works because people are out here while I'm thinking that I'm going to spend 60 percent of my income on taxes. And then the same for California.

California has the same progressive taxes and the most I can get tax would be 9. 9%, 9. 3%. And that range is crazy. That's, the range for to get taxed that is 93, 000 through 475, 000. [00:05:00] so I think I'm comfortably within that range. So the most I could ever pay in California taxes is 9. 3%. With that.

24 to 32 percent plus 9. 3 percent that is, less than 40 percent of taxes I'm going to pay overall. And most of those, like I said, is progressive. So a lot of things I do, I knock down my taxable income say, for example, I'm going to use round numbers.

I Make 200, 000 dollars this year, but I contribute to my 403 B and 457 and max those out. The contribution limit this year is 22, 000 dollars. So that's 44, 000 dollars that I am reducing my taxable income by. Meaning that I'm only paying taxes on 154, 000 dollars. And I have more deductions than that.

I have some other stuff I'll show you when we go through go through my check, but yeah, like I take a lot of a deduction. So that's where most of [00:06:00] the money that you see coming out is going. Taxes are high, let's face it, but they ain't that high. You guys, let's be real. All right. This is a picture of like my take home pay and you'll see

so I grossed 6, 800

That's not that how many hours I worked. That's just like, How my job or ADP codes things it's the kind of hours I work for example If I worked on a Friday as a charge nurse I'm gonna get the 12 hours pay for working my regular pay then I'm gonna get 12 hours credit for being a charge nurse and then I'm going to get 12 hours credit for working on a weekend So that adds up to 36 hours, even though I've only done 12 hours in that ship So if that makes sense to you, also, this check is a little bit lower than my normal check because I have a total of nine hours missing of six time.

Girl, I got taken out by a stomach flu. That was crazy. That went through my whole family. And [00:07:00] so I was in the middle of the shift and then left more than, like a. A quarter of the shift and then had to leave and go home and then recover the next day. I missed that and I didn't have enough sick time to cover both that shift and the next day.

But I want to say the actual amount of time I worked with 36 hours for 1 week, which is 3 days and then 17. 5 hours for the next week, which is a day and a half. Another thing I got paid for was Was a meeting and when I attend meetings that are on the, in the day shift, I don't get my nice shit differential.

So it's paid. I, an hourly rate, and I'm just breaking this down for you guys, because I know you guys like to do math and you're like, oh that just doesn't add up. It's never going to add up because you have to know everything I would get paid for in my paycheck, because I am benefited.

I do get paid for different things. And also we can share more about that in a minute. But yeah, so that's that and I wanted to talk about pre tax [00:08:00] deductions.

So with pre tax deductions, like I said, I can attribute to things that decrease my taxable income. My retirement is 1 thing and like I said, I have a 4 or 3 B and a 457 and if you guys want to know more about what a 457 is, leave me a comment, I'll expand on that. But. The important thing to note is that you can max out a 4 57 at the same rate that you can max out a 4 0 3 B or 401k.

So the contribution limits for 2024, I believe, are 2200 a 4 0 4 0 3 B and a four. And so that means that you can contribute another 2200 in your deferred compensation. Therefore. I max both of those out. So that's the 1800 dollars that you see coming out of my check. Then I also did care FSA is you can decrease your taxable income by up to [00:09:00] 5000 dollars a year for child care expenses.

So that comes out to 192 per paycheck that is pre tax that gets pulled out to help me pay for the childcare costs that I have. And then, the employee paid medical is actually, I only pay 1329 a paycheck for my family of 4. yes it is crazy and it is actually 1 of the things that we're about to strike for, because they're about to increase it and we don't want to pay more for our health insurance, but I feel very blessed that I, have paid that for a family of 4, but we are sad that they are trying to take that away. Therefore, we're probably going to go on strike in the next couple of weeks. And then also I take out 123 dollars for just a standard healthcare FSA, which goes towards medical costs, paying copayments prescriptions, all of those kinds of things.

And I used it to get this or a ring actually. Most [00:10:00] recently, so you can, buy health related stuff also through my FSA or even on Amazon, there's a category that things fall under FSA and you just have to submit those receipts and then they reimburse you some. There is that so those are my benefits and retirements that are pre tax that reduces my taxable income.

my taxable income actually was only 4600. From that 6800, it brought my taxable income down to 4600. So then when we look at taxes you see only paid 12. 100 in taxes and that those taxes included.

You can see the federal taxes. The taxes that I pay are 1200 dollars and federal taxes. 500 Social Security tax, 400 Medicare tax, 94 California income tax, which people say is so high as only [00:11:00] 165 dollars. And then state. Taxes is 7135 and I'm so thankful for state disability.

That's what helped me stay out on my maternity leave for 10 months. So thank God for that. And I don't care if you think that that as. To California taxes, because it is well worth it. And that's just not for maternity leave. That's for all disability. So that just breaks down like how much, like you see, like what I pay in my benefits which is almost 22 something over 2, 000 versus the 1, 200 I pay in taxes.

So it's not all taxes, you guys. And then The last thing that I pay for are this thing that that's falls under this other category. We go back here and then

that category is my union dues. I have life insurance. He just meant employee paid like life insurance for my kids. 74 cents a month. I have accidental death and disability [00:12:00] insurance that I pay for. And then I have long term disability insurance. That's the LTD 60. And then I have another like the.

500, 000 supplemental life insurance policy and then we is our hospital and association that I pay a dollar pay period for. Those are after tax things that they take out. That's only 97. Dollars a month. So that's how my paycheck breaks down I hope you guys learned something about the progressive tax system about how I get paid what i'm contributing and this is just one of my paychecks And again, this is not even a full paycheck as usual because I was I did not work that whole time But is one of my most recent ones where I can show you and break down, where my money goes Hopefully, this sparks some questions for you.

I'm happy to have a conversation around it next week. I will use this to actually break down like, how I actually spend my take home [00:13:00] pay where my money goes. Cost of living in the Bay area. Hit me up in my DMS on Instagram. If you guys have any questions, happy to answer those. But were you one of those ones that thought I paid over 50 percent of my income to taxes?

Let me know.

Hey there I’m Naseema

My dream is for everyone to know that financial independence is attainable with a little intentionality. Learn how I can help you finally break the cycle of living paycheck to paycheck.

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