The majority of us change jobs to improve our situation; often resulting in an increase in compensation. However, compensation is not just all about salary. When evaluating a new job, multiple factors such as benefits, commute and healthcare comprise the total package. While your salary may increase with the new venture, hidden expenses could negate some of that increase. I’m not saying any of these costs should make or break your decision, but it’s important to be aware and prepared for them.
For 2017, employees must pay 6.2% on the first $127,200 in pay (there was a large increase in the wage base in 2017, from $118,500 in 2016). After you reach that point, your employer stops withholding the tax. But, if you move to a different job, the new company must withhold the tax again until it has paid you $127,200. However, this is not lost money; any additional you pay over $7,886.40 (6.2% of $127,200) will be refunded to you when you file taxes. Just keep this in mind when planning for short term cash flow and budget needs.
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