Submitted by [deleted] t3_yf1320 in massachusetts
thomascgalvin t1_iu13wwe wrote
Getting a pay raise can only ever result in a loss of income if it causes you to lose benefits. If you receive EBT, for example, and go over the income limit for those benefits, a pay raise can actually hurt you.
But if you're talking about income tax, a pay raise never results in less income. Ever.
This is because the tax rate is progressive. Some example tax bands:
Min | Max | Tax Rate |
---|---|---|
$0 | $10,000 | 10% |
$10,001 | $20,000 | 20% |
$20,001 | $30,000 | 30% |
If you earn $20K, you pay 10% on the first $10k, and 20% on the next $10K - not 20% on the whole thing.
And if you start earning $30K, you pay 10% on the first $10k, 20% on the next $10K, and 30% on the rest.
A pay increase never results in less income due to taxes.
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