Natalie DunnCareerVillage.org Team
Natalie’s Answer, CareerVillage.org Team
Great question - before receiving a paycheck it can be quite unclear how much you actually take home. This depends on a few things:
1) Taxes: According to OECD*, the average tax rate for an employee in the US was 24%, though it may be higher or lower depending on your salary and other circumstances. That portion of your paycheck will be paid in taxes and you won't keep.
2) Health insurance: Full-time employees receiving health insurance through work are also paying automatically from their paycheck. There's a wide range of health insurance costs, but this is also a factor of your salary you don’t ultimately keep.
3) Other benefits you may pay for: if you pay for life insurance, dental or eye insurance, or other benefits through work, this will also come out of your paycheck
As you can see, the salary you take home depends on your taxes, health insurance, and other benefit costs.
When I began my career as a part-time intern (assistant network administrator) at a local financial firm during college (2004), I was pulling a measly $14k. In three years I more than doubled that by moving to a bigger city with a booming tech sector, at which point I was making $30k as an entry-level tech support engineer for an IT outsourcing company.
Fast-forward 15 years later, in 2019 I was making nearly $75k as a senior support engineer with a QA testing background. At that point, I knew I wasn't going any higher as a support engineer, so I made the jump into technical writing. Today, as a tech writer, I make $90k through my employer, along with extra money I make as a freelance writer on the side.
If you play your cards right, you can make a very solid living in tech.
Great question! As you will see with the responses, this varies somewhat for everyone. In my first full-time job after college, take home pay is my salary minus taxes, charitable giving, insurance, and 401k match. After those, I also save and subtract my expenses like rent, utilities, student loans. What's left is the money I can spend. I would recommend finding a budget template online or using a pay calculator online that can show you an estimate of what your salary may be after taxes. If you want to take it a step further, you can also look into where you might want to live and what the cost of living would be for that area. For example, how much is rent and groceries.
30% - Tax
10% - Wealth (Investment, saving)
10% - Charity (Contribution ,support causes)
20%- General expenses (Bills, Household expenses)
30%- Growth (Spending which help you to get elevated, learning)
Follow this rule and you will do best , if you can have your 3 months take home salary in your savings all time you are at safe zone anytime (big achievement) go for it.