US vs UK taxes etc

Scougar

Scougar

Scougar

Soldato
Joined
30 Jan 2007
Posts
15,485
Location
PA, USA (Orig UK)
So a post in another group got me thinking about this. Part of America was getting away from excessive taxes etc, so I thought I would paste the percentage breakdown of my own for an 40 hour work week. For reference I do corporate software development.

69% NET (Take home)
17% Taxes (Federal, Social, Medicare*1, State)
7% Benefits (Health Insurance, Eye care, Dental plan, Life insurance)
5% Retirement*2 (401K)

Notes:
*1 - I don't use medicare but pay into it.
*2 - This could easily be higher, but I'm the main money earner, so it goes on other things like kiddo's/vacations.

Curious on how the UK stacks up percentage wise
 
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Isn't it essentially the same once everything is counted? Though I suppose if you're a high-earner it probably makes more sense.
 
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An 80 hour week? No thanks.

How much do you deduct from your salary to cover healthcare deductibles?

Scotland's tax rates are listed here. On top of that we have National Insurance. Details are here.
 
Participant said:
80hrs = no kind of life. I bet it slips into the weekend too. That can rod off.
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It would have to. 80 hours over 6 days is over 13 hours a day. Add in commuting time - say an hour a day - and lunch time - another hour a day - and that's 92 hours a week away from home.
 
Quartz said:
An 80 hour week? No thanks.

How much do you deduct from your salary to cover healthcare deductibles?

Scotland's tax rates are listed here. On top of that we have National Insurance. Details are here.
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Scuzi said:
Interesting breakdown. I got similar calculations for being based in Louisiana. I have considered emigrating a number of times but the widespread expectation of...
...soured the deal.
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/facepalm. SORRY!! 40 hours. I looked at my two week paychecks, and didn't engage my brain. lol. Sorry.

I do however often do a lot of support work that might take me to 60 hours on occasion.(for zero extra pay)
 
Scougar said:
/facepalm. SORRY!! 40 hours. I looked at my two week paychecks, and didn't engage my brain. lol. Sorry.

I do however often do a lot of support work that might take me to 60 hours on occasion.(for zero extra pay)
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Madness, you've essentially just taken a 33-50%(maths brain no workey) pay cut.
 
theone8181 said:
Madness, you've essentially just taken a 33-50%(maths brain no workey) pay cut.
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Lol.

1) doubling my hours brain fart yes. 50%. I only have myself to blame LMAO.
2) unpaid overtime: this is normal, no matter the company in software development. It sucks being salaried over here for this reason, but the base pay is decent.
 
Scougar said:
Lol.

1) doubling my hours brain fart yes. 50%. I only have myself to blame LMAO.
2) unpaid overtime: this is normal, no matter the company in software development. It sucks being salaried over here for this reason, but the base pay is decent.
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I suppose that's the Trade off really.
 
Scougar said:
So a post in another group got me thinking about this. Part of America was getting away from excessive taxes etc, so I thought I would paste the percentage breakdown of my own for an 40 hour work week. For reference I do corporate software development.

69% NET (Take home)
17% Taxes (Federal, Social, Medicare*1, State)
7% Benefits (Health Insurance, Eye care, Dental plan, Life insurance)
5% Retirement*2 (401K)

Notes:
*1 - I don't use medicare but pay into it.
*2 - This could easily be higher, but I'm the main money earner, so it goes on other things like kiddo's/vacations.

Curious on how the UK stacks up percentage wise
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Given your federal/state tax rate is 17% I'd assume you'd be in the basic rate band in the UK, so roughly 32% tax (20% Income Tax, 12% NICs) ignoring the tax free allowances for Income Tax and NICs. Private pension contributions (the equivalent of the 401k) is quite employer specific but could be expected to add a few % more, but could also give tax savings depending how it is structured.
 
Higher Rate Tax Payer:
66% Take Home
27% Tax
6% NI

Retirement is above the line so isn't taxed (and actually pension contributions are a good way to keep your adjusted net income beneath £100k otherwise you end up with a reducing personal allowance).
 
Scougar said:
/facepalm. SORRY!! 40 hours. I looked at my two week paychecks, and didn't engage my brain. lol. Sorry.
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Phew!

Scougar said:
I do however often do a lot of support work that might take me to 60 hours on occasion.(for zero extra pay)
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This is not good. As @theone8181 says, this is effectively a 50% pay cut.

A quick Google shows that the average pay in Pennsylvania is $60K. That's about £43.5k at the current exchange rate of £1 = $1.38. Plugging that figure into this website and assuming a £200 / month - 5% - pension contribution I see you'd get a net income of about £31,000 or $43,000. That's slightly better than your assumed US take-home of $41,400. And you wouldn't have to work all those extra hours for no pay.

However, the average pay in Scotland is £25,616 which would give you a take-home pay of £18,817 - way worse on the face of it. But you wouldn't be expected to work all those extra hours so the equivalent would be a US pay of $40,000 or £29,000. And then Scotland becomes competitive.
 
Above 100k dollars, but since we file joint (married), that is a massive benefit for taxes. Filing individually would be massive hit.

I could do things like put pre-tax money against other health expenses, but its just a hassle for a small impact.

So far based on 1 feedback, it seems like it works out fairly similar overall. Less tax, but take a hit on healthcare over here.
 
@Quartz in the UK in Plymouth (lower wage area) I was getting sub £28kish/$38k a year. Over in the US in higher pay area, its well over £70/$100k, if you wanted to compare.

I did previously have a lesser paid role, and also worked Uber that added on 21ish hours a week to my work life.

Apart from fuel it is more expensive here, (in this area) as much as we like to think its cheaper. Think Sussex costs for something comparable.

As a naive 10 year younger person I thought I would be rolling in dough when I moved. It's taken me and my wife about 8 years to get us where it doesn't really matter too much what we buy. I think this is partly because of the housing bubble and cost of property and the necessity to have 2 cars.

I don't even know how people survive below the $50k line here.
 
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