Where does the rest of your paycheck go?
Why the deposit is smaller than the salary, what a tax bracket actually applies to and whether a raise can leave you worse off, and what you owe on money earned outside a payslip.
Why is my paycheck so much smaller than my salary?
A salary is the figure before income tax, payroll tax, health cover and any retirement contribution come out of it, and what actually lands in the account is usually somewhere between two thirds and four fifths of the number you were hired at.
Does a raise ever leave me with less money after tax?
A raise cannot leave you worse off through the tax system, because a bracket taxes only the part of your income above its threshold and never the whole of it, so the higher rate applies to the extra dollars alone.
Do I owe tax on money I make from a side hustle?
Yes — money earned from freelancing, selling, driving or any other work outside a payslip is taxable from the first dollar, and because nobody withholds anything from it, the tax is yours to set aside rather than something already handled for you.