Michael Fleischer, the CEO of an 83-person company in New Jersey called Bogen Communications, reminds WSJ readers of all the various taxes and costs that come with hiring employees.
The bottom line?
Putting $44,000 in an employee’s pocket means paying her a salary of $59,000.
This salary, meanwhile, actually costs the company $74,000. And the cost to the company and employee will rise steeply next year, at the same salary level, thanks to Obamacare.
The 33% surtax on top of an employee’s salary, says Michael Fleischer, is why he’s not hiring anyone. And the 25% surtax on Sally is probably why she feels so poor.
Here’s the breakdown:
Costs To Employee “Sally”:
SALLY’S SALARY: $59,000
LESS:
Sally’s share of health/dental: $2.376
State unemployment insurance: $126
Disability insurance: $149
Medicare: $856
State income taxes: $1,893
Federal income taxes: $6,500
Social Security: $3,661
NET TO SALLY: $44,000
Costs To Company:
SALLY’S SALARY: $59,000
PLUS:
Company’s share of health/dental: $9,561
Life and other insurance: $153
Federal unemployment insurance: $56
Disability insurance: $149
Worker’s Comp: $300
State unemployment insurance: $505
Medicare: $856
Social Security: $3,661
NET COST TO COMPANY: $74,000
Those Obamacare health insurance costs are going up 28% next year, by the way, says Michael. That compares to the 10% increases in each of the past two years.
