Calculating Take-Home Pay

Is it worth going to work?

**Instructions**

- The first three fields in green are your commuting expenses. Enter the distance to your job, the miles per gallon for your car, and the cost of a gallon of gas.
- The next two field in blue are the costs of leaving your house. Enter the daily cost for daycare if you have children. Work-related cost include all other expenses such as a dog walking service, coffee and meals out that you would not have if you stayed home, and a daily average for other expenses such as work clothes.
- The three fields in red are the taxes deducted from your check. Enter the approximate percentages of your pay that go to federal and state taxes. The 7.65% for Social Security and Medicare is automatically included. You do not need to enter anything.
- In the last field, enter your daily pay.
- Click the "Compute" button and you will see your daily: cost of gas, after tax pay and after taxes and expenses pay.

**Your Real Take-Home Pay**

by Joseph Ganem

As the cost of gas keeps rising, it becomes questionable if some people will be able to afford to go to work, or at the very least find it worth the effort to work. People in this category include those working low-wage jobs that require long commutes, moms who must also pay for daycare, and part time workers looking to supplement the family income.

For example consider a mom with one child who earns $100 per day—that is $12.50 per hour for an 8-hour day. Social Security and Medicare taxes of $7.65 are deducted off the top no matter what income filing status the mom has. Daycare can cost $20 and let us assume she drives the family minivan that gets 20 miles per gallon to a job 15 miles away—at $4 per gallon for gasoline that is $6 each day to commute. Already, she spends one third of her pay ($33.65) just by showing up to work.

If the money is used to augment income from a husband’s higher paying job, the money earned might still be taxed at 15% to the federal and 5% to the state. There goes another $20. There will also be other work-related costs such as coffee or lunch out, clothes and other miscellaneous expenses. If just a few dollars per day are spent on these expenses it is easy to see that the $100 per day job brings home only $40—about $5 per hour. If she has two children she would need to spend an additional $20 per day on daycare—about half of that remaining $40. It is no longer question of it being worth $100 per day to work full-time but is it worth $100 per week?

For people at the low-end of the wage spectrum taxes might not be a concern. But, a long commute can consume a large fraction of the earnings. A $7 per hour job is only $56 per 8-hour day. Suppose the commute is 30 miles each way in a low-gas mileage SUV or pickup. At 12 miles per gallon the commuting costs are $20 per day assuming $4 per gallon gas—more than one-third of the paycheck. If gas continues to rise to $5 or $6 per gallon as predicted, a person in those circumstances might be better off staying home. After all gas isn’t the only commuting cost. The vehicle must still be insured, maintained and paid for.

Use the take-home pay calculator on this page. Enter the numbers that apply to your situation and find out the amount of money you actually take home at the end of the workday.**Joseph Ganem** is author of the award-winning book: * The Two Headed Quarter: How to See Through Deceptive Numbers and Save Money on Everything You Buy.* Hear him talk about the book below.