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enougher's Avatar
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04-25-17, 02:30 PM   #1 (permalink)  
Your Salary

I'm not sure where to post this thread, so I'm hoping this is the right sub-forum.

My question is about ones salary. If someone says that their salary is $100,000 a year, does that mean it is $100,000 NET or GROSS?

An example would be this: let's say I make $40 per hour, and work 40 hours per week, my annual salary would total about $83,000 gross. So would $83,000 be considered my salary? or would it be how much I make net?

 
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04-25-17, 02:46 PM   #2 (permalink)  
Usually it's always the gross.


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04-25-17, 03:01 PM   #3 (permalink)  
If you are paid by the hour; then you're NOT a Salaried Employee . . . . you're a Wage Earner, and probably eligible for Over-Time, et cetera.

Salaried Employees get the same amount each pay period, regardless of how many hours they work.

 
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04-25-17, 03:02 PM   #4 (permalink)  
I agree, your income is your gross income before taxes. That's for W-2's.

As a contractor I need to report income differently for a loan as an example.

I report gross income minus business deductions and the number goes down.


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04-25-17, 03:13 PM   #5 (permalink)  
Usually it's always the gross.
I agree, your income is your gross income before taxes. That's for W-2's.

As a contractor I need to report income differently for a loan as an example.

I report gross income minus business deductions and the number goes down.
Thanks for clearing that up.

 
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04-25-17, 03:43 PM   #6 (permalink)  
I get some things taken out of my salary prior to taxes being assessed so even my W2 does not reflect the totality of my earnings and what I say is my (gross) salary.

 
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04-25-17, 04:46 PM   #7 (permalink)  
Is the question being asked to determine whether you'd qualify for a new apartment in a rent assisted or subsidized building ?

If so, then they probably have detailed guidelines about how that is calculated.

 
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04-25-17, 04:51 PM   #8 (permalink)  
I asked because of the prices in buying a house. The price of houses and how hard it is for someone to buy one is based off our net pay, and not gross. Just curious. And I get taxed big time, like Fed witholding, CA witholding, and a bunch of other taxes. And it turns out that my net pay is almost twice as less than my gross.

 
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04-25-17, 05:54 PM   #9 (permalink)  
And it turns out that my net pay is almost twice as less than my gross
Wouldn't that be less then half then your gross? Your taxes equal more then 50% of your gross?!!? That's why I do not live in CA..


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Last edited by Tolyn Ironhand; 04-26-17 at 07:31 PM. Reason: Yes, added "not"
 
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04-26-17, 06:05 AM   #10 (permalink)  
I'm pretty sure you meant "not" live in CA.


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04-26-17, 01:55 PM   #11 (permalink)  
Posted By: enougher "...The price of houses and how hard it is for someone to buy one is based off our net pay, and not gross..."
You have a mis-understanding of how people qualify for a Mortgage. Nationally, regardless of jurisdiction, the process is always the same, evaluating the Applicant's Income, Assets, current Indebtedness and their Credit worthiness.

It's your Gross Income that's factored into the decision making on how much debt (of various kinds) your income can support, using a method referred to as calculating your Mortgage Ratios. The standard rule for lenders is that your monthly housing payment (principal, interest, taxes and insurance) should not take up more than 28 percent of your income before taxes. This debt-to-income ratio is called the "housing ratio" or your "front-end ratio."

It is understood that once your own Real Estate, (like a House), you will then begin Itemizing Your Deductions against your Gross Income when you go to file your Taxes . . . . that's why the Gross Income is used in the qualification process. The Buyer's Income has NOTHING to do (or should have nothing to do) with the price asked for any piece of Real Estate.

Prior to this thread, I had thought that the OP was on some form disability, and seeking a rent assisted apartment to minimize housing costs and property maintenance issues with LandLords.

 
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04-26-17, 04:21 PM   #12 (permalink)  
I agree with Vermont, I'm in CAL. In your original post you gave the example of $80K gross income.

Even though houses are expensive here you might qualify, especially if you have a spouse that works or other reportable income.

If you are a veteran, it can be even easier to qualify. Houses here are real expensive but you could end up with both a house and paying less than rent for it.


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04-27-17, 03:34 PM   #13 (permalink)  
Well thank goodness...I had not known this prior to starting this thread. I thought that there was no chance in a lifetime that I could ever afford a house, but now it sounds achievable. And yes, I am currently seeking housing for disabled so I can save some money to put down for a house so that my mortgage will be lower. Thanks for the info guys!

 
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04-27-17, 04:01 PM   #14 (permalink)  
I asked because of the prices in buying a house. The price of houses and how hard it is for someone to buy one is based off our net pay, and not gross. Just curious.
Your original question is important when you put it in the context of buying a house. In the late 50s, when my father bought a house, his gross pay was 5,000. The house cost $15,000 which was 3 times his gross pay.

Today, the same house would cost about $400,000 & today's salary might be $50,000. That's 8 times the gross salary. Why? The answer is that the dollar isn't as strong as it once was. People try to explain it by saying that it's all "relative". They really want to say that it's "proportional" but it's anything but proportional. 8 times is way higher than 3 times.

My father worked & saved money, in the best economic times which was between 1945 & 1980. The rate of profit was grater than the accumulation of debt. That has now reversed as shown by the 20 Trillion $ debt. I was always taught not to "live above your means". My current debt is
about $500 or less which will be paid on the next due date. How many of you can say the same?

 
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04-27-17, 04:18 PM   #15 (permalink)  
Thanks for that input donoli.

They really want to say that it's "proportional" but it's anything but proportional.
I think I make that mistake all the time, I tell people it's the same proportion and obviously it's not.

In CAL it might be a little different though. If you bought a house in 91 for 180 and it's now 560K that's pretty good. Some people lucked out.
I did look at 180K as a lot though in '91.

*I meant to say I'm not in the boat of making a huge profit. The 180 I looked at as too much.


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04-27-17, 08:46 PM   #16 (permalink)  
My current debt is about $500 or less which will be paid on the next due date. How many of you can say the same?
The ONLY debt beyond my monthly living expenses (paid every month in full) I have carried for the last fifteen years or so has been a home equity loan. I'll have that paid off before the end of the year, a good ten years or more ahead of schedule.

 
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04-28-17, 12:46 AM   #17 (permalink)  
I have no debt...how bout them apples? I have one card from the CU for emergencies, but otherwise it's cash and carry only. Of course, I drive a 14 yr old car and have no real toys except tools and guns and don't really NEED any more of those.


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04-28-17, 03:47 AM   #18 (permalink)  
If the secret must be known, I've also been debt free for nearly 20 years; but I do run every purchase and every bill I get through my credit card and reap those Reward Points on my utility bills, insurance and anything else that I can pay that way (even my property taxes) . . . and then I schedule all of my bills to be paid in full; but at the last moment.

With Rewards Points, I earn several hundred dollars of "tax free" money each year; at least for now . . . . until they start sending me a 1099 for that income.

The only interest I've paid in that 20 year period was 64 about 14 years ago due to payment that arrived late because of the mail . . . . so I avoid the mail now.

But that 64 still gnaws on me . . . . a perfect record ruined !

 
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04-28-17, 05:07 AM   #19 (permalink)  
Like Vermont, I use my credit cards a good bit but always pay them in full when the bill comes. If it weren't for my wife and kids I'd probably wouldn't have paid any interest in over 25 yrs but she likes new vehicles [she does usually make the payment] and I've co signed on a couple of the kid's homes. That does help give me a high credit score with no interest paid by me


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04-28-17, 07:23 AM   #20 (permalink)  
I have one card from the CU for emergencies,
May I suggest a second credit card? Things can go wrong with only one card.

 
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04-28-17, 07:58 AM   #21 (permalink)  
I agree, while I have one card that I use almost exclusively, I have another that I only use once or twice a year if everything goes well but it's a back up when for some unknown reason my primary card gets declined.


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04-28-17, 10:17 AM   #22 (permalink)  
I have no debt. I use a high interest, cash back, credit card for most purchases and pay it off at the end of the month. I had an equity loan for a home reno but like Furd I paid it off early.

Until recently I used a debit card for daily expenses and a low interest no rewards credit card for daily purchases. Then I got turned on to the rewards card by my daughter. I'm still looking for the catch, but so far it seems to me like free money.

 
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04-28-17, 10:55 AM   #23 (permalink)  
I've been using a cash back rewards card for 30 yrs or more. Because I never carry a balance, the cash back equates to free money for me They've change the way it works and pays out over the years but it's still a net gain for me


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04-28-17, 01:25 PM   #24 (permalink)  
Actually, I DO have a bank credit card. I'd forgotten about it because I don't carry or use it. It's actually locked in my safe. I've never had a problem with the CU card in 25 yrs, can't imagine why I would in the future.


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04-28-17, 01:32 PM   #25 (permalink)  
My credit rating has been fluctuating between 800 and 820 for the last several years. I wanted it higher but according to the information I read I needed more accounts. So when one of the credit unions I belong to offered a new VISA I bit. I filled out the much abbreviated application and the next day was approved for $10G.

I fully expected my credit rating to go down initially but I just checked and it went up. Trans Union score went from 807 to 811 while the Equifax changed from 815 to 819.

I rarely spend cash for anything more than fast food or something that cost less than $20 because I just don't like carrying cash. My monthly CC bills will often hit five hundred or more, especially if I have to get prescription refills, but I pay them in full every time.

 
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