Coming in as E3, single, no dependents. No BAH no BAS. I know that should start me off at $2377.50 – I’m trying to budget – can anyone please help with the exact pay after federal tax? I want to know if I can afford to do 5% or 10% into TSP. My home of record is NY so I won’t be paying state taxes – I just need to know how much after federal taxes.
E3 pay after federal tax
byu/RecruitHopeful inMilitaryFinance
Posted by RecruitHopeful
6 Comments
Could look up a tax calculator and find the exact numbers
If you don’t have debt, you can **easily** afford 10%. I know people who joined, with your sort of situation, who put 60% into Roth TSP (the max the system allowed for AD AF). And if you can’t (afford at least 10%), you’re spending well beyond what you should be.
5% TSP (Roth option) and set any excess aside for a Roth IRA in a low cost brokerage. You can put up to $7k in Roth IRA per year.
Great thing is you can (but ahouldnt unless really needed) withdraw contributions from Roth IRA aat anytimw no extra tax or penalty. TSP has more withdrawal restrictions.
Here is why I asked this question. The calculators are kind of annoying: based on the output it keeps saying my income will be above $2377.50 (because it keeps adding something else, maybe BAS or BAH or so). Here is another one from USAA https://www.usaa.com/advice/military-pay-calculator/ which says my income will be $2837 (which is more than basic income instead of LESS, after taxes)
I usually use the Paycheck City calculator. Military base pay is taxes just like anybody else’s pay unless you’re in a Combat zone. Assuming all you do on your W-4 is check the Single box, I’m getting $120 for federal income taxes. It would be lower if you sign up for the Montgomery GI Bill or the traditional TSP.
There are Social Security and Medicare taxes as well.
If you’re in the barracks, you may still owe NY State taxes.
After basic training, you will get BAS. However if you’re in the barracks, you’ll also pay the Discount Meal Rate for the provided meals regardless of whether you actually eat them.
You should be contributing at least 25% of basic pay into Roth TSP to ensure you are [contributing 15%](https://www.schwab.com/learn/story/4-retirement-rules-thumb-explained) of your total [gross civilian equivalent compensation.](https://militarypay.defense.gov/Calculators/RMC-Calculator/) Or rather, whatever percentage gets you $650/mo. If that’s unaffordable because of life, the bare minimum you want to contribute is 10% of compensation, which would be ~$500/mo. You can’t go back and make up lost years, so you want to contribute this minimum before you pay extra toward debt unless you have double-digit interest rates.
Use a Roth IRA for anything extra you don’t spend at the end of the month.
Your total tax obligation (FICA, SS, and federal income tax) will [be roughly 10-11%](https://smartasset.com/taxes/income-taxes) of your basic pay. You should reasonably budget off of $2,000 / mo, $1,400 after Roth TSP contributions.