Aerospace Engineering Jobs: Why $135k/Year Could Be Worth More than $145k/Year
Never Neglect the Effect of Taxes on Your Take Home
Aerospace engineering jobs are some of the most sought-after roles in the United States. The reasons why include varied and interesting work, a great outlook for jobs, and high average salaries. But talking about salaries, what is a good salary? Can $135k really be better for your bank account than $145k?
How Much Are You Worth?
First, let’s discuss what you are worth.
According to the Bureau of Labor Statistics’ Occupational Outlook Handbook, the median salary for aerospace engineers in the United States is $118,610 (as of the last data capture, May 2020). This is substantially more than double the median wage for all workers, which stands at $51,168.
But how much should you earn? The average? More? Less?
Actual earnings are affected by several factors, including:
- Experience – generally, the more years of experience you have the more you will be paid.
- Qualifications – the level and quality of your education affects your pay, especially in the earlier years of your career.
- Seniority – the more responsibility you have and the larger the teams you may have managed, the more you are likely to be paid.
- Shift differentials – if you work unsociable hours, you can expect to be compensated for the inconvenience.
- Location – you’ll find that pay scales differ according to location.
Other factors also come into play, of course; for example, company rate structures (not all aerospace companies pay the same wages) and even your boss (how well you are liked by him or her).
The Importance of Location
All things being equal, you might expect to be paid the same salary if you are rating yourself on experience, qualifications, seniority, and shift differentials. When it comes to location, though – this is where things get interesting.
Let’s look at an example.
You apply for two jobs in aerospace engineering, one in Georgia and one in Florida. You’re single, and working in either location is appealing to you. You’re offered both:
- The hiring company in Georgia offers you $135,200 a year – $65.00 per hour
- If you take the role in Florida, you’ll be paid $124,800 per year – $60.00 per hour
You do some calculations, and might be horrified to find that over a 30-year career, you’ll be $180,000 worse off if you accept the position offered to you in Florida.
It’s an easy decision to make, right? Surely, you’re going to accept the role offered in Georgia. Or should you?
Salary Calculations Can Be Taxing
When comparing salaries between the same job in different locations, you must never forget to allow for state taxes. Some states, like Florida, don’t levy income tax on your earnings. Other states, like Georgia, want their pound of flesh.
SmartAsset has a great online tax calculator that is very enlightening when comparing earnings in different states. Plugging in the salaries as above, things look very different:
On that average aerospace engineer salary in Georgia, you’ll pay $6,308 in state income tax.
In Florida, you’ll pay no state income tax.
Suddenly, you realize that your hourly wage of around $3 more in Georgia will make you worse off than the lower salary in Florida. Over the 30 years of working in Georgia, you’ll pay almost $190,000 in extra taxes.
And don’t even get us started with California, where on a salary of $120,000 per year you’ll pay $7,849 in state income tax: more than $235,000 over 30 years.
Always Get the Math Right Before Signing a Contract
Never accept a job before drilling down into the financial implications. Making the wrong decision could cost you hundreds of thousands of dollars over your career. And if the difference were to be invested with even moderate returns, it makes for a pretty attractive option.
For some of the highest-paid roles in the aerospace industry, with great benefits to match, contact Precision Personnel today. We can provide sound advice and the attention to detail your career planning needs.
(Don’t forget, the above is an illustration only. Your personal circumstances will change the math.)
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