Tax brackets is a term used by accountants and other financial professionals used to describe the levels of which you will be taxed on. Or, what category of tax you will be. We at pay stub direct, have tried not only to make great looking paystubs but, have created a blog series to educate and have paystub tax brackets explained, amongst everything else, explained about the common paystubs
Everyone is taxed that works in this country, but, not all at the same level. This is based on a percentage of your income, and some are higher and some are lower. There are many factors, but, primarily, it's your living status, like Married, couple, single, head of household, etc. and the other part is, how much you make.
It's wise to know which tax bracket you are in, and how much money you're going to make this year, if you see yourself approaching the next bracket, it might be wise to slow down, and not work so hard, because you'll be taxed at a higher level. You will, in fact, earn less if you work more to make things easy, let's say there are 2 tax brackets, 0% and then 10%. I know it's oversimplifying, but, I'm trying to prove a point. and the 10% tax bracket started at 100,000$ Well, if you made 99,999$ this year, you would pay no tax, and bring home 99,999$ this year.
But, let's say you wanted to work on Saturday, or stay in the office late one night. and you made an extra $5.
Well, that would make you earning $100,004 Which means you'd be in the next tax bracket of 10%. So, that means, you'd have to pay 10% of $100,000. this equates to $10,000
So, you'd bring home $90,004.