mgriffiths Posted April 16, 2018 Share Posted April 16, 2018 I receive $10,000 per year from my employer as student loan repayment toward my PA school loans. It works out to basically $384.62/paycheck (26 checks/year). It's wonderful and I'm not complaining, but something seems weird with my paychecks. I am painfully aware that employer loan repayment is taxed as income, but when I compare my paychecks before I started receiving the loan repayment to after the loan repayment I make a net $274.84/paycheck. That is a total of $109.78 being taken out for taxes, or something else that I don't see. That is a 28.5% tax rate, in comparison to my "normal paycheck" that is taxed at 22.4% (still WAY too much being withheld, but will handle that separately). Does this seem weird, or is there an explanation that I missing? Link to comment Share on other sites More sharing options...
mmiller3 Posted April 16, 2018 Share Posted April 16, 2018 I will admit I am not terribly tax savvy, but did the $10,000 count as "income", and bump you to a higher tax bracket? There is no federal tax bracket of 28.5%, but I assume the way you are deducing taxes takes into account all deductions (i.e. Fed, state, SS, etc). I am tired, so this may not even be coherent, much less applicable... Link to comment Share on other sites More sharing options...
mgriffiths Posted April 18, 2018 Author Share Posted April 18, 2018 That is what I initially thought, but I would expect income, whether it is broken into categories by my employer, would be taxed at the same effective rate...I'm confused and unless someone can help I guess I'll just have to ask. Wouldn't be the first time someone else's mathematical error almost cost me money. Link to comment Share on other sites More sharing options...
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