Employer Costs, Take-Home Pay, and Tax Wedge for an    
Average Manufacturing Wage Worker in MONTANA    
  Amount Rank
Total Cost to Employer* $31,463 6
Take-Home Pay $22,267 33
Take-Home Pay, % of Employer Costs 70.8% 36
Tax Wedge* $9,196 6
Tax Wedge, % of Employer Costs 29.2% 9
Gross Earnings $27,200 N/A
Taxes Withheld from Worker's Paycheck    
Social Security/Medicare Payroll Tax $2,081 N/A
Federal Income Tax $2,048 N/A
State Income Tax $805 19
Total Taxes Withheld $4,933  
Hidden Taxes Paid by Employer on Worker's Behalf    
Social Security/Medicare Payroll Tax $2,081 N/A
Workers' Compensation Contribution $1,934 6
State Unemployment Insurance Tax $192 26
Federal Unemployment Insurance Tax $56 N/A
Total Employer-Paid Taxes $4,263  
Employer-Paid (hidden) Share of the Tax Wedge 46.4% 13
Source: Dean Stansel, "The Hidden Burden of Taxation: How the Government Reduces    
Take-Home Pay," Cato Institute Policy Analysis No. 302, April 15, 1998.    

*Total cost to employer does not include the cost of fringe benefits
(such as employer contributions to private health insurance plans and
pensions) and tax and regulatory compliance. The tax wedge does not
include the host of other taxes--property taxes, sales taxes, gas taxes,
cigarette taxes, etc.--that workers must pay with their remaining
take-home pay.


Last Updated on 4/8/98
By Mark LaRochelle