Average After-Tax Income By State

I saw this map and I thought these figures were high.

Source for map. Source for data.

I live in Pennsylvania. The median household income for Pennsylvania, before-taxes, was $59,195 in 2017.

I found the following about how much tax is paid from that $59,195:

How Much Is Generally Taken From My Paycheck In Pennsylvania?, Pennsylvania Institute of Certified Public Accountants, 22 August 2018

Employees are subject to payroll taxes at the federal, state and local levels. The standard federal payroll taxes apply to residents of all states. This includes federal withholding tax based on the employee’s W-4; Social Security tax, which is calculated as 6.2 percent of wages, and subject to a wage ceiling; and Medicare tax, which is calculated at 1.45 percent of wages, without a wage ceiling.

At the Pennsylvania state level, an employee is subject to two payroll taxes: Pennsylvania state withholding at a flat 3.07 percent of wages, and the Pennsylvania unemployment tax at a flat 0.06 percent of wages.

At the local level, the payroll withholding tax depends upon the employee’s residency and the jurisdiction of his or her employer. For example, a resident of Philadelphia who works in Philadelphia will have local withholding tax of 3.8907 percent; whereas a resident of a Bucks County suburb who works in Bucks County may have a local withholding rate between 0.5 percent and 1.0 percent.

Based on the two aforementioned examples, a Philadelphia-based resident and employee making $70,000, who falls in the 15 percent federal tax bracket, will have about $20,800 withheld in taxes. An employee fitting the same criteria but living and working in a Bucks County suburb, will have about $18,800 withheld in taxes.

That’s about 30%. This next source says 31.3%.

The Average U.S. Worker Pays over $16,000 in Income and Payroll Taxes, Tax Foundation, June 2014

The average U.S. worker faces a tax burden of 31.3 percent. This includes both income taxes and payrolls taxes. Between these two types of taxes, the average U.S. workers pays over $16,000 in taxes on their labor.

The tax burden is a combination of income taxes at the federal, state, and local levels as well as the employee and the employer payroll taxes. Of the 31.3 percent tax burden, 15.4 percent is due to income taxes and 15.9 percent is due to payroll taxes, over half of which is paid by the employer on the employee’s behalf. (Workers pay the cost of the employer-side payroll taxes through lower wages.)

In total, the average worker pays $8,196 in income taxes and $8,462 in payroll taxes, which are meant to fund programs such as Social Security and Medicare.

In the absence of the $16,658 in taxes and any benefits they provide, the average worker would take home $53,223 in income, as opposed to the current after-tax income of $36,564 for the average worker.

There are a lot of variations in these numbers! But if I apply a gross 30% tax burden to that PA median household income of $59,195 I get $41,436. The average or median take-home pay in PA is about $41,436.

That’s quite a bit lower than the $53,453 in the map above. It’s also not a lot of money to live on when you consider the skyrocketing costs of healthcare, housing, education, and transportation.

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