Employer Costs, Take-Home Pay, and Tax Wedge for an    
Average Manufacturing Wage Worker in VIRGINIA    
  Amount Rank
Total Cost to Employer* $30,045 44
Take-Home Pay $22,076 43
Take-Home Pay, % of Employer Costs 73.5% 13
Tax Wedge* $7,969 37
Tax Wedge, % of Employer Costs 26.5% 32
Gross Earnings $27,200  
Taxes Withheld from Worker's Paycheck    
Social Security/Medicare Payroll Tax $2,081  
Federal Income Tax $2,048  
State Income Tax $996 9
Total Taxes Withheld $5,124  
Hidden Taxes Paid by Employer on Worker's Behalf    
Social Security/Medicare Payroll Tax $2,081  
Workers' Compensation Contribution $612 44
State Unemployment Insurance Tax $96 44
Federal Unemployment Insurance Tax $56  
Total Employer-Paid Taxes $2,845  
Employer-Paid (hidden) Share of the Tax Wedge 35.7% 44
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