so a friend of mine received an offe from a ib boutique (in Los Angeles, CA). He said his comp was 3k per month after tax, how much is this in an annual or monthly before tax figure? any idea? is this far below other firms? thanks for all of the help.
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I am very confused - what is this 3k figure referring to?
A related question: Is bonus taxable?
You will soon find out that everything on this earth is and will be taxed!
let me clarify, apparently his paycheck (per month) will come out to approximately 3k after tax. So my question is, how much is this per month, approximately, before tax ? i.e 4k, 5k, per month? hopes this helps
Depends where he lives, but if NY, then assuming 25% federal + 12% payroll + 7% state + 3% city, he's probably being paid around 6k/month, so his salary is probably 70k. Basically, he's getting paid what everyone else is.
25% would be the marginal tax rate, but to do this calculation you should use the effective tax rate which would be closer to 15% depending what his salary is.
What in the world is a 12% payroll tax? If you are talking about FICA then it is 7.65%.
No way he is even close to making 70K.
I know a person who makes $43K in a "no state tax" state and brings home $3k after taxes. State taxes in California (at his pay scale) are effictively around 4-6%.
$60K in New York nets you about $3,300 - $3,500. $70K nets you about $3700-$4000 per month. Effectively you will not pay more in taxes in L.A. than you would in New York.
Therefore, Yacht-man is probably correct and The OP's buddy is making around $50K.
specifically in los angeles
That's approximately $65k/year before tax - aka more or less a normal investment banking analyst salary.
Not sure how Georgia compares but when I graduated a few years ago and moved to Georgia (non-banking job) my base was 48,600 and after taxes, after paying for my benefits and contributing $100 to my 401K I was taking home $2,850.
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