Submitted by Melon_Cream t3_z9vv2l in personalfinance
[SOLVED- Update at bottom]
Hey all,
I recently got a big promotion and started a new position making ~$10,000 more per year. I went from earning $44,000 and some change to around $55,000 and some change. I receive some extra taxable income in the form of tuition remission to the tune of $4100 a year which may be some of the reason. I am still unsure though.
Naturally, I was ecstatic! It was a huge jump and I was so excited to use the extra $10,000 to save. To my dismay, I got paid my first full paycheck and the net is only $25 more than at my last position. Nearly half my earnings are deducted.
A closer look reveals that my state tax is something like 2.25x what I was paying before. My federal tax withholding went up by 3x. From about $284 a month to a whopping $859.29.
I also owe some of these deductions to things like healthcare, parking, dental, etc. but those increases are in the 10s of dollars…
I knew I’d probably lose some of the extra pay to taxes… but is this really correct? I feel so cheated…
Edited to add:
State: New Mexico
Status: Monthly/Salaried
Gross: $3428/$4599
Take Home: $2232/$2253
Deductions:
Health/Parking/Mandatory Retirement- $585/754
Federal Tax- $284/859
State Tax- $93/241
Social Security- $200/400
Medicare- $50/95
Edit #2: Thank you all so much for the help. I believe it is due to my tuition benefits being taxable and the excess being taxed in these next two pay periods. Contacted my HR and they confirmed this was likely the case. If my January paystub comes back with the same messed up deductions, then I will reach back around. I appreciate all the insight for you all- I was sure it didn’t seem right but was also concerned that I could be incorrect and didn’t want to seem a fool.