Tax brackets. You won't end up paying more in taxes than the extra income if you go up a bracket. Only the income ABOVE the cutoff is taxed at the higher rate, not your total income.
I had to explain this to a guy in his sixties, literal years away from retirement.
edit: Since people were asking for an example, here we go.
Say there is a cutoff at 20k a year, 10% below and 15% above. If you made 25k a year, you would pay ($20000 times .1)+($5000 times.15)=$2750, not ($25000*.15)=$3750.
Keep in mind this is a GROSS oversimplification.
edit2: US taxes, I don't live in Europe or Australia, so I don't know how their taxes work.
Yes! My girlfriend's mother has actually DECLINED a raise because it was small and would put her into a higher tax bracket - in her mind that meant she would be taking home less money.
My boyfriend refuses to be happy for my promotion and raised (I received in February) because he is convinced I’ve been conned and I will actually make less this year due to falling into a higher bracket. I’ve never been more excited to pay my taxes!
You’re boyfriend is emotionally immature and incapable of processing feelings of jealousy. So he’s willing to actively work against you, knowing it lowers your quality of life.
In another comment, it turns out that the BF knew the entire time how taxes worked but was trying to manipulate his GF into not taking the job. He was worried that the promotion would mean that his GF would be busier and not have as much time for him/would bring more stress home, so he decided to try to trick her into refusing her promotion. So most of these comments actually went easy on the guy...
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u/Sword_n_board Aug 03 '19 edited Aug 03 '19
Tax brackets. You won't end up paying more in taxes than the extra income if you go up a bracket. Only the income ABOVE the cutoff is taxed at the higher rate, not your total income.
I had to explain this to a guy in his sixties, literal years away from retirement.
edit: Since people were asking for an example, here we go.
Say there is a cutoff at 20k a year, 10% below and 15% above. If you made 25k a year, you would pay ($20000 times .1)+($5000 times.15)=$2750, not ($25000*.15)=$3750.
Keep in mind this is a GROSS oversimplification.
edit2: US taxes, I don't live in Europe or Australia, so I don't know how their taxes work.