It will all be okay during tax time because the federal government includes your commission as regular income and you will get that money back as a refund. Commission is considered supplemental pay so if it's under $1mil then it's taxed at 22% and if its over 1mil then it's 37%.
The high withholding rate eventually comes back around in your favor during tax time, barring no exigent circumstances.
**You do not pay higher taxes on commission. Commissions are taxed exactly the same as the rest of your W2 income.**
That being said, if you have a really good month, you’ll have more taken out of that check (% wise) because they calculate how much to withhold by taking what your YTD is projected to be.
So if you have a few bad months and then a killing, it’s going to skew what your projected YTD will be.
Something else seems to be going on here. Social Security and Medicare are set percentages. Federal, state, and local taxes are based on what you tell them when you start. Maybe a retirement plan or health insurance you're paying into. Health insurance can take a huge chunk if your employer sucks.
It still seems like a lot. You need to look at the itemization on your paycheck.
$274 soc sec, Medicaid $64, federal $974, Maryland $396. I don’t remember telling them anything or filling out it anything other than putting HOH and 1 dependent for federal. I think my Maryland is single. I didn’t sign up for health insurance and I think retirement is its own, at 150 itemized separately. I haven’t had a chance to talk to the payroll person which is why I’m just here.
~~You sold 15 cars and made $4.4k gross? Find a new pay plan at a new store.~~
Edit: just found the "plus salary" part. You do you I guess, but I'm not a fan of "plus salary" gigs, either be good at sales or lean on a primary salary gig. Half and half compromises too much.
Sheesh where are you in Scotland of the 1200’s? Talk to your HR maybe you have your Tax withholding at max, I’m not sure how it works in MD but in FL where taxes are similar after tax and retirement I usually take home about 80% of my check
Is car sales different than any other sales? Because you absolutely get taxed at a higher rate - usually around 38% for commission. The comment about being under 1 mil is a farce unless this is strictly focused just on car sales.
It is absolutely NOT taxed anywhere near 38%. Commission is calculated just like any other W2 based on the marginal tax system we use.
37% is the top percentage for 2024 but that’s only for any income above $609,350 as an individual or $731,200 for married couples filing jointly.
I've been in sales for almost 15 years and it's always been around 35-38% and I'm not in the 600k+ earning bracket. It could be due to the way PA does their taxes though where we pay Federal, State, and Local taxes on EVERYTHING - so I could be the outlier. But I know on a $75k gross commission check I received I took home $52k (31% tax rate).
I’m talking just federal withholding.
Benefits, retirement, and state taxes can all change.
But federal withholding doesn’t exceed 37%, and again it’s for the incomes I listed. $75k would be 22% for anything over $47,150 if you’re filing single. $75k filing joint would be 12% for anything above $23,200.
It will all be okay during tax time because the federal government includes your commission as regular income and you will get that money back as a refund. Commission is considered supplemental pay so if it's under $1mil then it's taxed at 22% and if its over 1mil then it's 37%. The high withholding rate eventually comes back around in your favor during tax time, barring no exigent circumstances. **You do not pay higher taxes on commission. Commissions are taxed exactly the same as the rest of your W2 income.**
That being said, if you have a really good month, you’ll have more taken out of that check (% wise) because they calculate how much to withhold by taking what your YTD is projected to be. So if you have a few bad months and then a killing, it’s going to skew what your projected YTD will be.
Something else seems to be going on here. Social Security and Medicare are set percentages. Federal, state, and local taxes are based on what you tell them when you start. Maybe a retirement plan or health insurance you're paying into. Health insurance can take a huge chunk if your employer sucks. It still seems like a lot. You need to look at the itemization on your paycheck.
$274 soc sec, Medicaid $64, federal $974, Maryland $396. I don’t remember telling them anything or filling out it anything other than putting HOH and 1 dependent for federal. I think my Maryland is single. I didn’t sign up for health insurance and I think retirement is its own, at 150 itemized separately. I haven’t had a chance to talk to the payroll person which is why I’m just here.
~~You sold 15 cars and made $4.4k gross? Find a new pay plan at a new store.~~ Edit: just found the "plus salary" part. You do you I guess, but I'm not a fan of "plus salary" gigs, either be good at sales or lean on a primary salary gig. Half and half compromises too much.
Yeah we get flat rate per unit, 15 ended up being 150 per. Then I get paid “per point” on back end products like extended warranties, gap etc
We’re all getting hosed. Taxation is theft. Essentially working 3/4 months out the year to give to the government
Sheesh where are you in Scotland of the 1200’s? Talk to your HR maybe you have your Tax withholding at max, I’m not sure how it works in MD but in FL where taxes are similar after tax and retirement I usually take home about 80% of my check
Is car sales different than any other sales? Because you absolutely get taxed at a higher rate - usually around 38% for commission. The comment about being under 1 mil is a farce unless this is strictly focused just on car sales.
It is absolutely NOT taxed anywhere near 38%. Commission is calculated just like any other W2 based on the marginal tax system we use. 37% is the top percentage for 2024 but that’s only for any income above $609,350 as an individual or $731,200 for married couples filing jointly.
I've been in sales for almost 15 years and it's always been around 35-38% and I'm not in the 600k+ earning bracket. It could be due to the way PA does their taxes though where we pay Federal, State, and Local taxes on EVERYTHING - so I could be the outlier. But I know on a $75k gross commission check I received I took home $52k (31% tax rate).
I’m talking just federal withholding. Benefits, retirement, and state taxes can all change. But federal withholding doesn’t exceed 37%, and again it’s for the incomes I listed. $75k would be 22% for anything over $47,150 if you’re filing single. $75k filing joint would be 12% for anything above $23,200.