As someone who has lived squarely in the middle class tax bracket for most of my life, I find it a bit doubtful, that a normal, middle class person would be tracking their income so precisely that they would tell the boss, “Sorry, I can’t work any overtime, I’ve already made too much money this week…” L o L . . .
Yes, as you make more income, your tax rate increases, but only a little bit and only on that extra money that you make that put you into that higher tax bracket…
The average auto mechanic salary in Virginia is $58,500 per year or $28.13 per hour. Entry level positions start at $41,600 per year or $29.00 per hour while most experienced workers make up to $83,200 per year or $40.00 per hour. (These values assume a 40-hour week…)
Contrary to my previous posting, the Tax Table Threshold amounts have increased this year. Meaning that if you made exactly the same amount this year as you did last year, your tax liability would be less (small consolation for all the inflation…).
The new increased Tax Table Thresholds are 12% up to $11,600, 12% up to $47,150, 22% up to $100, 525, 24% up to $191,950, and if you are making almost $200k a year, I imagine your accountant is keeping track of your hours for you… L o L . . .
So, based on the above dollar amounts, it does not matter if you are the average or most experienced mechanic, both of these mechanics are in the same tax bracket… Only the entry level mechanic would be in a lower tax bracket and rightfully so…
Continuing, the Average Mechanic could work an additional 1,490 hours a year or 29-hours a week or almost 6-hours overtime a day (that’s almost 14-hours a day…) before earning enough money to hit the next higher tax bracket…
And the Most Experienced Mechanic could work an additional 433-hours a year or 9-hours a week or almost 2-hours overtime a day (that’s almost 10-hours a day…) before earning enough money to hit the next higher tax bracket…
So, based on this information and if those Average Mechanics work so long and so hard for their take home pay for the Average Mechanic to break into the 22% Tax Bracket their actual take home pay for the very last hour would drop from $24.74 to $21.95 when the hit that magic 22% tax Bracket.
And the Most Experienced Mechanic take home pay for the very last hour would drop from $35.20 to $31.20 when the hit that magic 22% tax Bracket.
I would hope that these folks are maximizing their pre-tax deductions… Just some to consider…
Healthcare Insurance, Health Savings Accounts, Supplemental Insurance Coverage, Short-Term Disability, Long-Term Disability, Dental Insurance, Vision Benefits, Child Care Expenses, Medical Expenses and Flexible Spending Accounts, Life Insurance, Commuter Benefits, Retirement Funds (401(k)s and IRAs…), Tax-Deferred Investments (especially when the employer offer a matching contribution…).
For the uninitiated, Pre-tax deductions are taken from an employee’s pay before taxes are withheld. These reduce taxes owed and increase take-home income by lowering the income that is taxed.
Now, all of this was based on a 40-hour workweek and no accounting was made for overtime pay and I will be posting another topic concerning the pay a mechanic receives based on the actual hours spent on the job and the rate that the shop charges for their work based on the Flat Rate Schedule…