So I'm currently interning with 4 kids and we all got our first paychecks today (direct deposit). When I checked mine, I was taxed at around 20% when I'm definitely in the 10% tax bracket. One of my other interns chirped in saying that he was taxed around 13%.
Annoyed at this discrepancy, I emailed my HR specialist about what was going on and I let her know in the email about the difference between my tax rate and my fellow intern's tax rate.
Now, I notified my dad about this difference in tax rate and he said not to let HR know that you know what your colleagues are making because they are paid according to skill.
I already sent the email before my dad got back to me and now I'm worried that they might be annoyed that I know what my fellow interns are making.. I mean, we all should be making the same amount because we're paid by the hour and the same amount.
Should I be worried that I sent this email?
Umm, maybe. HR doesn't like people knowing what you make. Apparently overseas it is common to know everyones salary, but here it is hush hush. I think since you mentioned the tax bracket and not salary directly you should be fine. I wouldn't worry too much.
the tax rate on your paycheck might just reflect differences in what amounts are withheld for each employee, based on the tax forms you filled out on orientation day. eg: you may have more withheld because you're a dependent. i had close to 30% withheld from each paycheck during my SA stint. in the end (ie: after tax returns), you all will receive the same amount.
You don't need to say you know what your colleagues are making. You can just say you wanted to make sure there's not a mistake in your payroll withholding because it seems high and when you checked with colleagues their tax withholding is a much lower rate of gross pay.
Also, your taxes are estimated and that estimation is withheld from your paycheck since its much easier than getting a 60K tax bill come April... when you file taxes any over/under estimation will be refunded/due. So you're not actually losing any money (ignoring TVM). Obviously, its not desirable to front the government money so you should raise it to HR. You can also -- and this may vary from firm to firm -- request a specific amount/% to be withheld. For example, a friend of mine is a VP at a boutique where the max salary even for MD's is very low, for VP and above 80-95% of all in comp comes in the form of year end bonus. So he requests a minimal amount to be withheld from his regular salary so he can better afford his lifestyle since he'll probably be getting +80% of his compensation at the end of the bonus year and can have the balance of his estimated taxes withheld from his bonus.
Thanks for the responses guys.
Yeah, I didn't mention specifically the salary numbers. Rather, I referenced the tax rates: that I was being taxed close to 20% and my fellow intern around 13%.
That should be fine, right?
Also, forgot the mention this, but we all filled out the tax forms exactly the same. We're all dependents, etc. Not too sure about the amount withholding, but I know our forms were identical, sans the personal information components.
Does this mean that I will be getting a tax return? When does that happen? Sorry for these stupid questions; I've never dealt with taxes and stuff before.
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