The Paycheck Autopsy

Let's take a representative example: a senior engineer at a big Seattle tech employer with $220K base, $30K target bonus, and $80K in RSU vests spread across four quarters — $330K total comp. Depending on the payroll cycle, their monthly gross might be around $18,300, but what lands in checking is closer to $9,800. That $8,500 gap is the story.

• Federal income tax: the single biggest line. At 24–32% marginal, this is roughly $3,500–$5,000 of the gap per month.
• Social Security: 6.2% up to the wage base (~$168K); you'll max out partway through the year and see this disappear from later paychecks.
• Medicare: 1.45% on everything, plus an extra 0.9% over $200K earned individually or $250K joint.
• Washington state tax: none. You already won the state-of-residence lottery.
• Pre-tax 401(k): typically $1,900/mo if you're on track to hit the $23K federal max.
• HSA: if you're on a family HDHP, you can redirect $8,550/yr through payroll pre-tax and pre-FICA.
• ESPP: post-tax withholding that buys company stock at a discount — you don't see it in checking but it's building up in your brokerage.
• Supplemental tax on RSUs: a flat 22% federal withholding, which is often too low for earners over $200K.

1. The RSU withholding gap. The default 22% supplemental withholding is roughly 10 points below a real 32% marginal rate. On $80K of annual vesting, that's $8,000 of surprise tax — usually discovered in April. Fix: supplemental withholding at a higher rate, or quarterly estimates.

2. The mega backdoor Roth. If your plan supports after-tax contributions plus an in-plan Roth conversion, you can stash up to $46K/year in Roth in addition to the $23K regular max. That's the single biggest retirement-tax lever available to W-2 earners, and most people leave it completely untouched.

3. The HSA as a retirement account. If you're on a family HDHP, the HSA is a triple-tax-advantaged account: pre-tax in, tax-advantaged growth, tax-advantaged distributions for qualified medical expenses (subject to IRS rules). The move: max it, invest it (not all HSAs allow this — check), and pay medical expenses out-of-pocket now while keeping receipts for reimbursement later.

4. ESPP discounts can be meaningful. A 15% discount with a lookback provision can produce meaningful returns on the discount component. Worth evaluating participation, including holding-period and tax considerations. Investing involves risk including loss of principal.

5. Charitable bunching. If you're in a high-income year (big vest, big bonus), consider bunching two or three years of charitable giving into a single-year donor-advised fund contribution. You itemize that year, take the standard deduction the others.

6. The withholding audit in November. By November, you have 10 months of real data. A 15-minute review with a CPA or advisor can identify if you're headed for a massive underpayment penalty — and the fix (a year-end supplemental payment) is still possible.

Most Eastside families aren't short on income. They're short on visibility. The Paycheck Autopsy isn't about finding pennies — it's about making sure the six plays above are happening on purpose, not by accident. Capturing them can mean meaningful additional pre-tax or tax-advantaged contributions each year, with compounding effects over a career.

Hypothetical example: a 35-year-old client earning $400K who maxes the mega backdoor Roth (where the plan permits) and holds it until 65 may accumulate substantial additional tax-advantaged retirement savings, subject to qualified-distribution rules. Outcomes depend on actual contribution amounts, return assumptions, and tax law. Investing involves risk including loss of principal. No strategy assures success or protects against loss.