# Higher income in gvt, but take home pay much lower??



## chafien (Feb 28, 2015)

Hey guys, help me make sense of this:

In the private sector, my income was $45,000 and my take home was around $1320 bi weekly.


In the government, my income is $55,000 and my take home is $1245 bi weekly.


How does that even make sense?? 

I know I pay for pension, union dues, but I feel jipped!


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## m3s (Apr 3, 2010)

Pensions aren't free. And you're in for the long haul if you want to make it worth while.


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## none (Jan 15, 2013)

I can only speak for BC government.

Union dues is (I think) about $1000 a year and pension is about 8% of your salary. The government chips in about 8.5% of your salary. Unless you were counting the government contribution in your 55K?

It probably more that a good chunk of your income at lower levels is either taxed less or not taxed at all. You are now well into the 2nd teer tax bracket!

Welcome to the progressive tax system (which also helps pay your salary!)

http://www.taxtips.ca/taxrates/bc.htm


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## uptoolate (Oct 9, 2011)

And you don't know the entire story until you get your tax refund.


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## OptsyEagle (Nov 29, 2009)

Take two pay stubs, one from each place you worked. Start with the gross income and see where the money goes. It should all be there. The experience will be a lot more informative to you then the responses you could possibly get from us, who can only guess at what is going on.

I know when someone is reaching into my pocket, I usually want to know who it is, where it is going and why it is happening and can I do anything about it. Perhaps that is just me.


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## none (Jan 15, 2013)

uptoolate said:


> And you don't know the entire story until you get your tax refund.


If you don't then you're doing it wrong. He/she undoubtedly has filled out a T1213


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## chafien (Feb 28, 2015)

I haven't filed any tax returns yet but I my numbers are based on salary and take home pay deposited into my account.

I got my first deposit from the government last week.

I don't have the pay stub yet to look at the numbers...



I just feel jipped because the supposed pay raise for a new position turned out to be a pay cut!!!


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## none (Jan 15, 2013)

Well there are health insurance premiums, life insurance, pension, union dues AND you're in a higher tax bracket.

Just looking at the take home pay is a very simplistic way to look at it - you need to look at the whole package. Like I said previously, if you work for the BC government about 8% of your gross is being removed from your paycheck and is being put into your pension which is more than matched by the government.

http://www2.gov.bc.ca/myhr/article.page?ContentID=932dbfa5-d6de-869a-24a8-715b924515cb


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## Eclectic12 (Oct 20, 2010)

chafien said:


> ... How does that even make sense??
> I know I pay for pension, union dues, but I feel jipped!


Any time I've compared my private DB pension versus a public sector one ... not only are the benefits a lot better but the employee contributions are a lot higher.

For example, with the same salary - the private DB pension has a 4.4% contribution for the employee whereas I've seen employee contributions range from 7.1% to 11.5% for a public sector version.


Cheers


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## uptoolate (Oct 9, 2011)

none said:


> If you don't then you're doing it wrong. He/she undoubtedly has filled out a T1213


And this would be a first?


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## none (Jan 15, 2013)

That he is filled out a t1213? how would i know?


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## uptoolate (Oct 9, 2011)

Sorry none. I meant 'the first time that someone would be doing it wrong'. I think the majority of the population thinks that it is some great bonus when they get a tax refund - the bigger the better. Most of the folks on here know that this just means that you overpaid your taxes and that the government has had money that you could have been investing.


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## none (Jan 15, 2013)

Yes, that makes sense. It's funny, people always complain when they don't get a refund. I get upset if I don't owe money!

Same planet, two different worlds eh?


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## RBull (Jan 20, 2013)

chafien said:


> I haven't filed any tax returns yet but I my numbers are based on salary and take home pay deposited into my account.
> 
> I got my first deposit from the government last week.
> 
> ...


Relax. Wait until you have your stub like OptseyEagle said. Sit down with your previous job stub and your new one. Get to understand what is happening- what the gross amounts are and where the money is going.

Ensure you look at the total picture including all benefits, not just what you put in the bank now.


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## Eclectic12 (Oct 20, 2010)

none said:


> If you don't then you're doing it wrong. He/she undoubtedly has filled out a T1213


Based on the surprise that more expensive benefits eat into the take home pay ... I suspect there is no T1213 filled out.
The OP knows for sure.




chafien said:


> I haven't filed any tax returns yet but I my numbers are based on salary and take home pay deposited into my account.
> ...I just feel jipped because the supposed pay raise for a new position turned out to be a pay cut!!!


Can you sign me up to be in a similar situation?
Based on what I'd read of gov't benefits, I'll happily take the bump up in benefits, especially the pension. :biggrin:


To use an analogy ... the question is whether paying less for ten cable channels makes more sense than paying more for 150+ channels, movies on demand and premium movie channels. 

I suspect that an apples to apples comparison will make it feel less of a problem.


Cheers


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## OhGreatGuru (May 24, 2009)

As noted, OP needs to look at the details of his pay stub(s) to see if he is comparing apples to oranges. Also he should check if he correctly filled in a TD1 for his employer. Pension contributions will be a large deduction, but they are also tax deductible, so employer's payroll software should account for this in calculating tax deduction.


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## lightcycle (Mar 24, 2012)

Also are you comparing end of year pay stubs with beginning of year stubs?

Beginning of year stubs (like right now) might be lower because of the deductions like CPP, which might get maxed out later on in the year at which point they stop being deducted from your pay slips.


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## OhGreatGuru (May 24, 2009)

There is a small change that occurs after you pass the CPP MYPE. But assuming his pension plan is integrated with CPP (as most government and large corporate plans are), the % contributed to the government plan usually increases after one passes the MYPE, so there may not be a very large change in net pay.


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## LBCfan (Jan 13, 2011)

Like CPP, EI also is usually fully paid before year end.


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## 0xCC (Jan 5, 2012)

chafien said:


> In the private sector, my income was $45,000 and my take home was around $1320 bi weekly.
> 
> In the government, my income is $55,000 and my take home is $1245 bi weekly.





LBCfan said:


> Like CPP, EI also is usually fully paid before year end.


The OP is not likely to hit the MYPE or max EI. CPP MYPE for 2014 = $52,500 (http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/cnt-chrt-pf-eng.html). EI max insurable earnings for 2014 = $48,600 (http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/ei/cnt-chrt-pf-eng.html).

The OP would not have hit the CPP or EI contribution limits in 2015 yet for the new position and they would have never hit them for the previous position. Without more information from the OP I would suspect that the difference is pension deductions or possibly union dues.


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## CalgaryPotato (Mar 7, 2015)

Between the union dues & pension, government paycheques are definitely smaller. I know over my 14 years working in government that the pension percentage has almost doubled to cover previous shortfalls. It takes a big chunk (although still worth it for the eventual benefit). I find when I get a raise now, I only get 50 cents on the dollar, the rest gets lost between taxes, pension and dues.


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## rsyl (Aug 15, 2014)

Is it not possible this was also for a partial pay period since we are talking about the first payment.

Maybe the work week is Friday to Thursday and he started on Monday. Getting only 9 days pay.


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## Silverbird (Mar 5, 2013)

OP mentioned biweekly pays, Bit of a ong shot, but maybe there is a difference here between old position was semi-monthly, new one is bi-weekly?

Pay stub will tell the tale as everyone else has mentioned


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## chafien (Feb 28, 2015)

hey guys thanks for the advice!

just got the new pay and its $1460s so i guess the pay period is off by a few days!

Net / Gros is now around 70% instead of the original 50% that I thought it was.


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