10 Ways to Boost Your Take-Home Pay
When you look at the paycheck you get every other Friday, are you dissatisfied? Do you wish it could be higher?
If you've answered "yes" to either of these questions, take heart! The following 10 strategies you can do now will increase your take-home pay. They all require different levels of effort, and each come with different levels of payoff. (See also: 25 Ways to Make Money Today)
1. Check Your Withholdings
A quick and easy way to increase your income is to make sure that the tax man doesn't take more than he needs to. You don't want to have too much federal income tax withheld from your paycheck.
The W-4 is a form you fill out whenever you start a job. You use it to choose the amount of Personal Allowances you claim.
Here's how it works. The more Personal Allowances you claim, the less taxes you'll have taken out of your paycheck.
Just to be clear, however, this doesn't give you a free reign to cheat the tax system. You need to have enough taxes taken out of each paycheck, or else you'll end up owing money to the IRS at tax time next year.
So review your situation annually or after a major life change. If this results in you being able to claim more Personal Allowances, then update your form W-4, and give it to your HR department.
You should see a bump in your take-home pay within a few pay periods.
2. Check Your Payroll Deductions
As part of your total compensation package, you probably receive benefits that include — but aren't limited to — life, medical, dental, and long-term disability insurance.
Are you a relatively healthy person who actively monitors your well-being? Sometimes it's beneficial to see if switching to lower-cost insurance providers or decreasing your amount of coverage makes sense for you. Doing so will give you a slight bump in pay.
3. Submit Your Expense Reports on Time
Do you attend all-hands meetings at an offsite location? Drive to work meetings at a different facility? Are you asked to buy food for meetings? Take a client out to lunch? Have you taken advantage of your educational reimbursement program to advance your career?
Although you normally pay for these expenses upfront, they're usually reimbursable to you by submitting an expense report. The key is to do this as soon as you can, so you don't delay repayment.
4. Work Overtime
If you're a non-exempt employee, you get paid for working overtime. This means that for every hour you work more than 40 hours per week, you get paid at least one-and-a-half times your hourly rate.
Let's say you work 45 hours per week and normally get paid $25 per hour. This means that for those last five hours, you're getting paid more for your time — $37.50.
Not only are you getting paid for your extra time, but you're also getting paid at a higher rate.
Is there a busy season at your company? Do you do your job well, and does your boss know about it? If so, volunteer to work overtime if your boss asks you.
5. Earn a Raise
Most companies have a process to give employees a merit increase. There's usually a time of year when management performs an annual compensation review.
The process will probably involve reviewing your work performance to see if you've reached your goals. So work hard and do well this year, and you'll likely get a merit increase next year.
6. Get the Bonus
Many companies have a results-sharing program that pays you a bonus if the company achieves its goals. This bonus payout is usually dependent on your job performance, as indicated by the rating you receive on your performance review.
If you do your job well and help the company achieve its goals, you should see this nice boost in your paycheck once a year.
7. Cash Out Your Vacation Time
Do you have more vacation time than you actually use? With company holidays and floating holidays, you may have more time off than you need.
If this is the case, then cash out some of your vacation time. These hours are usually paid at your hourly rate and subject to income tax. Check your benefits handbook to confirm.
8. Get a Side Job
What if you don't get paid for overtime at your day job? Or what if you want to diversify your sources of income in case your day job isn't too stable?
In addition to your day job, you can boost your take home pay by getting a part-time job. This will give you a whole new paycheck that you can rely on.
9. Get a New, Higher-Paying Job
A merit raise will probably only boost your take home pay up to a limited amount. Landing a new position, however, is likely to increase your pay much more.
Take courses to improve your skill set. You can often get reimbursed for them by your company through its educational reimbursement program. By doing this you'll put yourself in a position qualify for a higher-paying job in the future. In fact, you can make it part of your five-year financial plan.
10. Negotiate a Higher Salary
As mentioned earlier, a merit increase will only increase your income a limited amount. And if you're not ready to apply for a higher-level position, then the next best step is to negotiate your salary in your current position.
Talk to your boss about what you can do to add more value, and quantify that value in terms of a salary increase. Do the extra work, and then ask for a meeting several months later to evaluate your progress.
If you can document your results and come to an agreement, you'll have earned that increase.
Have you been able to increase your take-home pay? How did you do it?