MRHerrera
Financial Ministry

What does it look like…

What does it look like to live within the recommended percentages? The percentages are what you are going to dedicate for each category in your budget.
What does it look like
What does it look like to live within the recommended percentages? The percentages are what you are going to dedicate for each category in your budget. Below are the percentages: Category                                                        Recommended % Tithe & Charitable Gifts                                         10-15% Savings                                                                           5-10% Housing                                                                         25-35% Utilities                                                                           5-10% Food                                                                                 5-15% Transportation                                                          10-15% Clothing                                                                           2-7% Medical/Health                                                            5-10% Personal                                                                          5-10% Recreation                                                                     5-10% Debts                                                                                5-10% The first one is the tithe. People ask if this based on the gross or the net. The Bible tells us to give God of our first fruits. For us this means the gross. The gross is what you earn not what you take home.

Federal Tax

An employee’s wage rate, marital status, number of deductions and payroll frequency will affect the amount of federal taxes withheld from each paycheck. Each pay date is considered a separate event requiring a deduction for federal and state taxes. The IRS provides easy-to-use calculation tables to determine the deduction amount.

State Tax

Some states require state payroll tax deductions on earnings. In those states, employees fill out a separate withholding form that serves as a guideline for calculating state tax deductions.

Social Security Tax

Social Security taxes are levied to comply with the Federal Insurance Contributions Act. In most years, employers deduct a flat rate of 6.2 percent of an employee’s paycheck up to the annual maximum; that maximum in 2012 is $110,100. Employers also contribute 6.2 percent of an employee’s Social Security taxes.

Medicare Tax

Also in keeping with FICA, employers deduct Medicare taxes at the rate of 1.45 percent of all wages earned. The employer is required to contribute at the same rate to the employee’s Medicare taxes.

Local Taxes

Some counties and cities impose mandatory taxes that are taken as payroll deductions, such as state disability and unemployment insurance.

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