how does total cost to company affect the employee?

Question

I was horrifeid to hear that my friend salary as well as mines had an equal gross but her take home was much more than mines! why?

Answer 1

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the following are possible reasons why her take home pay is higher than yours:

a) taxes due - if she has many dependents than you are, definitely her withholding tax is smaller than yours

b) loans - amortization payment differs depending on the term, interest of the loan

c) health card/insurances

d) other salary deductions

Assuming all things equal, (position and work functions) and the two of you have same gross, then it should not affect the employee because the company is just fair in paying the salaries and wages.

Its just that there are factors that contribute to the differences in the take home pay and these factors are mostly bound by each individuality such as status (single, married, head of the family, with or without childen, etc), and/or obligations deducted from the salary.

Answer 2

It depends on how many dependents one has, how much the two of you are putting into a savings plan, your insurance, etc. It's never a good idea to compare checks if you don't go over every line and discuss it. Personally, I don't think anyone should ever show their check to another person. It's an easy way to cause a lot of trouble and lose a friend.