Estimating the Next Paycheck

I can be obsessive about money (at times) particularly in terms of tracking it. I don't mind spending it, but that's another story for another time. So for me, it's that time of year again to archive my bank statements and estimate my next paycheck.

For the last bunch of years, I've been using a spreadsheet setup using payroll deduction rates to estimate what my net pay will be. The IRS website has the formulas employers use for estimating the Federal income tax (tiered, not a straight rate). My rounding always seems to be off by a few pennies but is close enough to get an idea of what the net will be. From there, you need to know what other deductions will cost (Medical, commuting, 401K, etc) and what is pre-tax and what is post-tax. Once the spreadsheet is setup, it's just a matter of adjusting the rates and formulas each year. For example, the Federal Income Tax brackets shift a little bigger each year. I'm assuming this is some sort of inflation adjustment.

This is working out well for me this year. My health and commuting expenses are going up this year (as expected of course), but my raise (assuming I'll be granted one) isn't showing up for the first few checks. But because of the adjustment in the tax brackets, I'm actually staying about even in terms of net pay give or take a few dollars. It's all just about cancelled itself out for now.

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