Archive for January, 2013

New pay periods available

For some time now, people have been asking me to add different pay periods to the results table on The Salary Calculator – not everyone is paid weekly or monthly, so the information displayed was not as helpful as it could be. Well, today, The Salary Calculator has been updated so that you can choose the pay periods which are displayed in the results table. New options available are two-weekly or four-weekly pay.

The old standards of Yearly, Monthly, Weekly and Daily are still available and will be displayed by default. However, if you get paid on a two-weekly basis you can now tick the “2-weekly” checkbox at the bottom of the options to have that displayed in the results table. Alternatively, if you get paid every four weeks (as opposed to monthly), you can tick that option instead.

This is long overdue, I’m sorry to everyone who waited so long to have it available – thank you for your patience! I hope you find this useful – please let me know in the comments if you have any problems with it.

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Tuesday, January 22nd, 2013 About The Salary Calculator No Comments

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Updates for USA tax changes

Over the New Year period I was in the USA, watching with interest as the government there tried to resolve their tax and spending problem that was called the “fiscal cliff”. This cliff was due to the fact that many of their tax laws were due to expire at the end of 2012 and they had not yet agreed how to proceed for 2013. Tax years in the USA are the same as calendar years, starting on 1st January, so it was important that they reached a conclusion over the holiday period.

There is a US version of The Salary Calculator, and so I needed to know how to update it for 2013. Unfortunately, when the answer came, it wasn’t simple and it wasn’t very clear, either. As well as changes to some of the tax rates (including an increase for the top rate from 35% to 39.6%), there was an additional Medicare (health care) tax of 0.9% on those earning over $200,000 ($250,000 for married couples). There was also the re-introduction of old regulations which reduce the amount you can deduct before tax – Personal Exemption Phaseout (PEP) and “Pease” (reduction of pre-tax deductions named after the congressman who created it). PEP is similar to the personal allowance reduction which occurs in UK tax if you earn over £100,000 and applies to those earning more than $250,000 ($300,000 for married couples). Pease reduces pre-tax deductions such as charitable giving for those earning more than these same thresholds. The overall effect is to increase income tax revenue, largely from the upper middle class and the wealthy.

As well as applying these tax changes to The Salary Calculator, I also had to include something called Alternative Minimum Tax, which is used to make sure that taxpayers don’t use so many deductions and loopholes to reduce their tax burden below a certain percentage of their income. This had been in effect for a few years but was rising in prominence and the number of taxpayers it affects, so I was overdue in adding it.

All of this led to a significant amount of work, not least in finding reliable figures for the thresholds and rates which apply to all of these for 2013. Even though I believe I have found the latest ones, the US government is meeting again later in the year to discuss tax plans again, and it is possible that these figures or rules may even be changed again – if this happens I will update the US Salary Calculator with the latest information. To learn more about the tax calculations, see this page about the US Salary Calculator.

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