Taxes
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Taxes |
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Net and Gross Pay Federal Taxes State and Local Taxes
Taxes, no one likes them, but everyone has to pay them - and not just federal taxes, there are state taxes, local taxes, school district taxes, and social security taxes.
Every time you receive a pay check, you can see the types of taxes you pay. The next time you get a pay stub, read it carefully. At the bottom there are two totals - one for gross pay and one for net pay. Gross pay is the amount before taxes are taken and net pay is the amount after taxes are taken.
If you divide net by gross and multiply by 100, you will know the percentage of your salary that goes to taxes.
For example if your biweekly salary is $1200 - gross pay - and you see that your net pay is $864, then
$864 / $1200 * 100 = 28%
So, you pay 28% of your salary to taxes.
The IRS has their own web site and provides information on details of federal taxes. Part of that web site is a section called TAXi - an interactive site designed for students and teachers. A tax term glossary and detailed information about tax forms and procedures is provided.
To learn more go to Taxi now.
To learn more about state and local taxes, you will need to go to a specific state or township office or web site.
For example if you live in Whitpain Township in Pennsylvania, you would go to PA's Individual Tax Payer site and to find out about local taxes in Whipain Township you would go to their home page.
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Last modified 06/19/02