Hidden Expenses at a New Job
If you have a job offer, congratulations. Before you sign the offer letter, consider the hidden expenses that can change the pay increase in the job offer. Here are some things to consider before you accept the job.
The hidden expenses in tax increases with a pay raise
Have you checked to see whether the new salary puts you into a higher tax bracket? The Internal Revenue Service provides a tax calculator that you can use without signing into the IRS website. You do not have to identify yourself when you use the calculator. To use the IRS tax calculator, start here.
The hidden expenses in the commute
Will the new job have a longer commute? If so, some elements of your car cost will increase with a longer commute.
- Repairs and maintenance
- Tolls and/or Parking fees
Failing to evaluate your increased car costs is a mistake. To give you some idea of how much a commute affects your income, the Internal Revenue Service allows 55 cents per mile for business use of a personal car. Although in most cases you cannot deduct your commute costs from your taxes, you can use the IRS numbers as a basis for the cost of operating your car for your commute.
The hidden expenses in clothing costs
For some people, getting a new wardroom is a lot of fun. However, paying the bills for the costs of those new clothes is not a lot of fun and can take a bite out of the pay raise that came with the job.
Other costs to consider are washing and ironing of work clothing. Some people wear T-shirts and shorts, baggy jeans, or a wrinkle-free skirt. They do little more than fold their clothes when they take them out of the dryer. These people may never pick up an iron to prepare their clothes for work.
Other people send their clothes to the laundry and dry cleaners. If your new job will increase your clothing costs, you should include those costs in your evaluation of job offer.
The hidden expenses in insurance costs
It is great that when a new company offers insurance for your health. However, the costs to you can vary greatly from insurance plan to insurance plan. You need to look at the costs to you in the medical coverage: the deductible, the prescription coverage, hospital coverage and charges, and other charges that can raise your medical costs.
The hidden expenses exist in every job offer
Understand the hidden expenses at a new job before you take the job.