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I have recently switched jobs, where previously I was getting paid semi-monthly and now I am getting paid weekly. When I look at all the taxes and Social Security taken out at my previous job it is at about 22%. This seems right with where I should fall in the tax bracket.

In my new job, it totals up to be about 28%. I don't understand why this would be different as I am claiming 2 and Married at both places. If I look at my semi-monthly paycheck which is about $2k more than my weekly paycheck from my new job, the federal taxes are only like $40 more. Also my last paycheck from my previous employer was a lot less as I didn't work one of the weeks and is about $1k more then my weekly new paycheck but the old one is $100 less in federal taxes, despite being more gross income.

I am trying to figure out if there is something I can do to make it be more like my last company in terms of taxes but even trying the ADP calculators seem to match what my paycheck is saying and even putting the allowances up to 4 doesn't seem to effect it much.

This is kind of frustrating because I was anticipating more money with this change in jobs as I am making a lot more money but in reality when it comes down to it I am only making a few hundred dollars more a month than what I was.

What I don't understand is like I said earlier, the ADP calculators match more of my new job, but my old job's semi-monthly is processed by ADP and doesn't match what the calculators are saying, the calculators and everything seem to do 28%. I should be falling into the 25% bracket and since I researched how tax brackets work, it makes sense that previously it was about 22% being taken out.

Anyone have any knowledge on this?

  • The withholding from every single paycheck is a function of the gross amount paid, your allowance status, and the periodicity of the payroll. There is both a function as well as a lookup table the IRS provides in Publication 15: irs.gov/publications/p15/ar02.html#en_US_2016_publink1000254685 – user662852 Oct 22 '16 at 2:55
  • If you are making more money, you will pay more taxes. Are you making more money? If so, you should expect to pay more taxes. – BrenBarn Oct 22 '16 at 4:15
  • It would be easier to analyze this if you did not combine federal, state, and Social Security in your numbers. Can you look at how much, percentage-wise, was withheld from your checks in federal income tax only, not including Social Security/Medicare, and edit this into your question? – Ben Miller Oct 22 '16 at 5:34
  • You mentioned the 25% tax bracket. To clarify, is this the bracket you were in with your old job, and you still expect to be in this bracket with your new job? – Ben Miller Oct 22 '16 at 5:36
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    @dbo2 If you understand it now, feel free to write up your own answer explaining the misunderstanding and resolution. Alternatively, if you don't have a question anymore, you can delete it if you like. – Ben Miller Oct 22 '16 at 13:18
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The answer is simple -- your new job pays more than your old one. As such, you're in a higher tax withholding bracket, even with the same number of deductions as before.

Your withholding is computed based on how much you make each pay period, and the number of pay periods in the year. So, if you were being paid weekly before then it was based on the assumption you made the same amount for every pay period in the calendar year. This is why tax varies from week to week for hourly employees and people being paid overtime. In your new job, you're being paid "semi-monthly", which makes for 24 pay periods rather than the 52 pay periods when you were paid weekly, so the amount of withholding (in dollar terms) is going to be much greater than when you were being paid weekly. Add in the fact you're making $2,000 more (a month, I presume?), so that's $24,000 a year more. It's definitely going to bump you into a different earning bracket for taxes, so even with the same number of deductions, you're going to pay more now.

This isn't to say you won't be able to recoup some of that at the end of the year when you file your taxes, since your current withholding rate may have you over-paying. As such, you'll see a nice refund.

One final note -- You always have the option of changing your withholding if you like. Many people will do that, claiming minimal deductions for the first few months of the year to let the maximum withholding take place, then they'll adjust their withholding deductions in the second half of the year to capture more in each paycheck. If done right, it makes no difference in the total amount withheld, but it does allow the checks at the latter part of the year to be bigger than if withholding deductions were kept the same throughout.

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