this post was submitted on 15 Nov 2023
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Work Reform

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[–] [email protected] 1 points 11 months ago (2 children)

Shouldn't the discussion revolve solely around SPENDABLE income? Am I misunderstanding something? I'm sure I am.

[–] [email protected] 3 points 11 months ago (1 children)

No, salaries are based a pre-tax basis. In other words you’re told you’ll make $120,000 per year, that amount is before taxes.

[–] [email protected] -2 points 11 months ago (1 children)

But companies also pay taxes before even paying you. So they'll pay 140k to pay you 120k which you'll earn 100k (along those lines)

[–] [email protected] 3 points 11 months ago* (last edited 11 months ago) (2 children)

They pay tax after paying you.

Payroll is an expense that gets deducted from revenue before calculating taxes.

They pay employer contributions/insurance/deductions but you pay the tax on it. It's to avoid double taxing that money (corp pays tax and you pay tax).

Edit for replies: yes, they pay payroll tax but that is based on payroll, and is a percentage of payroll. The other replies were referring to bottom line tax and revenue/profit. Maybe I should have been clearer but I was trying to keep it easy and not muddy the waters.

[–] [email protected] 1 points 11 months ago

Companies pay tax on employees as well.

[–] [email protected] 0 points 11 months ago

I have run payroll myself. When you run payroll, a company pays taxes to the government. Every paycheck. There are taxes the company is liable for and not employees.

[–] [email protected] -1 points 11 months ago (1 children)

I thing comparison to the employee salary makes no sense whatsoever. Different businesses have different expenditure structures depending on various things, like the type of business their are doing. In some companies, salaries might be dominating expense, in some others barely noticeable. Says nothing about how "fair" the business is.

[–] [email protected] 2 points 11 months ago

And two companies with the same proportional structure, but of different number of employees, will have different numbers in this representation.