Some clarification for those who post about their paycheck going down. [View all]

[Glassunion]

Ok so Jan. 1 has come and gone, and now you are looking at a paycheck that is lower. Before you get upset and jump up and down how Obama has screwed you, do me a favor and take a long hard look at that paycheck, not just the bottom line of what you take home.

If you look at your last paycheck from last year and your first paycheck from this year, what are the differences in the federal withholdings? There is only 1 change: Social Security (assuming you make under 400K, this post does not apply to you).

If you live in one of the 9 states that does not have income tax, that change in Social Security change should be the only change to your paycheck, and will equal 2% of your pay before taxes.

That said, now look at the rest of your paycheck. Does your state withhold taxes? I pay two state taxes, as I live in one, and work in another. So I have to pay my home-state and local income taxes and my work-state family leave, disability, unemployment, and workforce development taxes. All of these, with the exception of my home-state and local income taxes have an annual maximum. So come mid-year when I have contributed the annual maximum, they no longer withhold these taxes. But come Jan 1, I am responsible for paying them again. So, do you have any state taxes that you were not paying in Dec, that you are now paying in Jan? Perhaps so.

Also, look at your retirement (401K), medical, or life insurance withholdings. Some of these may have annual maximums as well, so come Jan 1, you will have to start contributing to them again.

For me, my take home dropped about $65 a week. However less than a third of that was Social Security, the rest of the deductions are the state taxes that I must contribute to every year, a good chunk of which have annual maximums.

Remember, this is exactly what you were having withheld 2 years ago. If you just entered the workforce within the last two years, I'm sorry, but those are the breaks. You were not having the proper amount of your pay withheld for your Social Security benefits in the first place.

Here is a breakdown of contributions by annual salary for only the Social Security increase.

Annual Salary and additional 2% Social Security withholdings per week.
15,000 = $5.77
20,000 = $7.69
25,000 = $9.61
30,000 = $11.54
35,000 = $13.46
40,000 = $15.38
45,000 = $17.31
50,000 = $19.23
55,000 = $21.15
60,000 = $23.07
65,000 = $25.00
70,000 = $26.92
75,000 = $28.85
80,000 = $30.77
85,000 = $32.69

So if you make $35,000 a year and your paycheck went down more than $13.46 when compared to your paycheck in the last week of December, than you should look to your state taxes or personal withholdings.

If you are still upset, I'm sorry, but I hope this helps direct your anger in the right direction. But remember, it was a holiday, and holidays do not last forever. Otherwise we would call them "everydays".