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How much of a salary do you actually keep?

I'm a sophomore student athlete interested in information technology.
#Technology #Career #Salary

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Natalie’s Answer, CareerVillage.org Team

Hi Zach,

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.

*http://www.oecd.org/tax/tax-policy/taxing-wages-united-states.pdf
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Joyce’s Answer

In addition to Natalie's answer I would also recommend looking at building your savings. Check to see if the company offers a 401K or a retirement plan especially if they offer to match the amount because that is additional money the company is giving you for your future retirement. This would also factor into how much of your salary you are keeping.
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James’s Answer

Definitely ditto to the previous answers. If you're asking what salary to expect, though, here's what I can share:

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.
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Elise’s Answer

Hi Zach,

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.
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Vidhya’s Answer

Good question !! in adding to all the comments and sharing i must say i missed to ask this question when i started my Career and lost almost 10 years. So happy to share what works best - How much of a salary do you actually keep? Your salary should be well planned and handled with care like you have a guest at home (hospitality we do) same way this should be treated. sharing you simple math, trust me i have been doing this for 6 yrs now it creates magic

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.
Thank you comment icon Vidhya, great advice! I like your breakdown on the % percentages. It's a clear way to see what needs to go where. Sheila Jordan
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