Reality of my Google Salary after TAXES

Summary

The video explains the real take-home salary of a Google engineer with a 62 LPA package, using the example of a bright student, Kamla Gita Raman. The breakdown includes base salary, joining bonus, relocation bonus, and stock options, showing how the total package is reduced significantly after taxes. Kamla's effective salary, after tax deductions and educational cess, amounts to about 31 LPA, but due to stock vesting over four years, the monthly take-home is roughly 1.7 LPA. The video concludes by advising viewers to focus on career growth instead of expecting parties based on high salaries.

Takeaways

• 😀 Kamla Gita Raman, a bright student, gets a 62 LPA package at Google, but after taxes and deductions, her take-home salary is significantly lower.
• 💼 The 62 LPA package includes components such as base salary, joining bonus, relocation bonus, performance-based bonuses, and company shares.
• 📊 The shares are worth Rs 31,80,000 but are vested over four years. Kamla only receives part of the shares in the first year, reducing the immediate cash value of her package.
• 🧾 After deducting the standard deduction of Rs 75,000, Kamla is left with Rs 39,25,000 taxable income.
• 💸 The new tax regime divides her income into slabs, with different tax rates applied to each slab, resulting in a tax liability of Rs 8,67,500.
• 🎓 An educational cess of 4% is added to the tax, making the total tax liability Rs 9,02,200.
• 🏦 After tax deductions, Kamla’s effective package drops from Rs 62 LPA to around Rs 31 LPA in terms of gross salary.
• 💰 Kamla can only access the stock bonuses when they vest over the next four years, so her immediate cash earnings are lower than the overall package suggests.
• 🍽 The net salary after tax deductions and stock vesting amounts to roughly Rs 20,40,000 annually, or Rs 1.7 lakh per month.
• 📝 The video emphasizes that while big salary packages may seem impressive, the actual take-home pay is much lower after taxes, deductions, and the delayed receipt of stock bonuses.
• 🎯 The creator encourages viewers to focus on skill-building and career growth rather than relying on others for a celebration or party, underscoring the importance of hard work and preparation.

Q & A

What is the total salary package of Kamla Gita Raman at Google?

Kamla Gita Raman's total salary package is 62 LPA (Lakhs per Annum), which includes base salary, bonuses, and stocks.

How is the 62 LPA package broken down?

The 62 LPA package consists of Rs 22,44,000 as base salary, Rs 2,00,000 as joining bonus, Rs 1,70,000 as relocation bonus, and Rs 3,36,000 as performance-based bonuses. Additionally, Rs 31,80,000 worth of stocks are part of the package, vested over 4 years.

What portion of the 62 LPA is actually received in the first year?

In the first year, Kamla Gita Raman effectively receives Rs 40 LPA, as she can only access 33% of the stocks (Rs 10,50,000). The remaining stocks are vested over the next 3 years.

What is the tax-free standard deduction provided by the government?

The government provides a standard deduction of Rs 75,000, which is subtracted from the total taxable income.

How much taxable income does Kamla Gita Raman have after the standard deduction?

After applying the standard deduction of Rs 75,000, Kamla’s taxable income is Rs 39,25,000.

What are the income tax slabs applicable to Kamla's taxable income?

The tax slabs are as follows: 0-3 lakhs (0% tax), 3-7 lakhs (5% tax), 7-10 lakhs (10% tax), 10-12 lakhs (15% tax), 12-15 lakhs (20% tax), and above 15 lakhs (30% tax).

How much tax does Kamla have to pay based on her taxable income?

Kamla's total tax comes out to be Rs 8,67,500 based on the taxable income of Rs 39,25,000.

What is the educational cess and how much does Kamla have to pay?

The educational cess is 4% of the total tax. For Kamla, this amounts to Rs 34,700, which is added to her total tax.

What is Kamla's effective total tax liability?

Kamla’s total effective tax liability, including the educational cess, is Rs 9,02,200.

What is Kamla's take-home salary after taxes and how is it calculated?

Kamla’s take-home salary after taxes is approximately Rs 31,00,000. This is calculated by subtracting her total tax liability of Rs 9,02,200 from her initial taxable income of Rs 40,00,000.