When we are hired for a new job, get a pay raise, or a promotion, we look forward to a fatter paycheck. However, when we get paid we despair at how much of our hard-earned money is deducted in the form of taxes and other contributions.
There are several ways to avoid such a disappointment, like estimating the net paycheck amount after all the possible deductions rather than fantasizing about something that is not going to happen. However, estimating the correct paycheck amount can be a confusing, hectic, and time-consuming job as you have to go through numerous calculations, rates, and payroll laws.
How can you boost your take-home pay without violating any laws? Here are some suggestions:
Increase your value as an employee
You as an employee must find a way to become more valuable to your employer. Your bosses need to see clearly that giving you a pay rise is in the interests of the company.
Learning is a lifelong endeavour. The world’s highest salaried employees continually make sure that they are up-to-date with any new developments in their profession. They keep learning by attending specialized courses, regularly reading professional and academic journals, and going to as many relevant conferences and conventions as they can.
Key employee
If you manage to become a key employee, you will be in a much stronger position to get the pay rise you have been seeking.
A key employee is somebody who the company cannot lose. The business’ commercial and financial health depends on that person continuing within the company. If a key employee leaves, it could prove devastating for the employer. Their absence could lead to massive losses or even the downfall of the business.
Produce results
If you are a salesperson, aim to become the best one in the whole department. If you can bring in lots of business, your bosses will notice. Good employers reward people who produce lucrative results.
Don’t expect to be paid more if you have not been working hard or have not done anything to make the company more profitable.
Work Overtime
If you are a non-exempted employee (which is usually an hourly employee), and it’s a busy season at your company, you should consider working overtime.
Overtime refers to time worked on top of your normal working hours. If your normal working week is 40 hours, and you worked 45 hours that week, you have done five hours overtime.
Most employers offer a higher hourly rate for overtime work. For example, if you are paid $10 per hour during your 40 hour week, and overtime is paid at time-and-a-half, you will earn $15 per hour for those extra hours.
Some employers pay double or triple time for hours worked on, for example, Christmas Day or New Year’s day.
Both the Fair Labor Standards Act and state laws in the United States require employers to pay overtime at usually one-and-a-half times the regular hourly rate.
Redeem your holidays
Getting low on budget? Consider skipping some company holidays and floating holidays, and get money instead of time off?
However, remember that money isn’t everything. Your mental and physical health also matter. If you don’t take time off to relax, your risk of developing a physical or mental illness could increase.
Review your Withholding Allowance Certificate
A Withholding Allowances Certificate is a Form that an employee fills in when they start a new job. This form is provided by the IRS, like Form W-4 and some others which relevant state taxation departments issue. The form includes all the necessary details about the employee including filing status, number of allowances to claim, number of dependents, etc. These details are then used by the employer to determine the amount that the employer needs to withhold from your paycheck for the IRS and State.
Make sure you fill out the Witholding Allowance Certificate and other forms correctly. A seemingly minor mistake could mean that you end up paying too much or too little tax. If you pay too little, you will most likely get a giant tax bill one day, plus a hefty penalty.
If you pay too much tax, your take-home pay will be lower than it should be, which no employee wants. Even if the tax authorities refund that money, you will have provided them with an interest-free loan.
Review your Contributions
Are you young, healthy, and don’t foresee any hefty medical expenses or retirement? Then, why not TEMPORARILY lower or discontinue your contributions like life, medical, dental, and long-term disability insurance plans. This will increase your take-home pay.
It is a risky move, however. Nobody can be completely sure that they won’t develop a serious illness over the next twelve months or suffer a debilitating accident.
Get a part-time Job
If you have the energy after doing a full-day’s work, you could look for part time job. You would then be receiving two incomes. However, check wether your employer allows you to do that. Some jobs require workers to rest for a specific number of hours between shifts.
If a truck driver, for example, works too many hours each day, their ability to drive safely suffers.
Getting a Higher Paying Job
There are times when your stubborn boss doesn’t agree on your pay appraisal no matter how hard or better you work. If this is your case, you need to seek employment elsewhere with an employer who values hard work and good results.
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Interesting related article: “What is Net Income?“