What do utilities really cost once you count the income behind them?
A bill you cannot opt out of, taxed differently in almost every state.
Residential utilities sit in an unusual position: many states exempt them from sales tax entirely as a necessity, others tax them at a reduced rate, and a number apply the full rate plus separate utility-specific levies. Because the bill is non-negotiable and recurring, the gross income behind it compounds quietly — it is one of the largest lines in most baskets and one of the least examined.
- Sales tax is modeled as not applying, which reflects the most common residential treatment. Several states do tax utilities, sometimes at a reduced rate and often with additional franchise or regulatory fees on the bill — enter your own combined rate if yours does.
- Utility-specific surcharges and regulatory riders vary by provider and are not modeled separately; enter your actual all-in bill to capture them.
Residential utility taxation genuinely varies — some states exempt it as a necessity, others tax at a reduced rate, and several apply the full rate plus utility-specific levies. None of that is modelled: the spend side here is zero in every state, so only income tax moves this figure. TODO(verify) — needs a sourced per-state utility tax dataset before it can claim more.
The income tax in this figure is still computed from Texas and your filing status.
to cover utilities
- Income tax (federal, FICA, state)30%$89
- Utilities70%$210
- Income tax (federal, FICA, state)
- Utilities
Data for nerdssources, confidence, assumptions
Where each number comes from
| Component | Amount | Confidence |
|---|---|---|
| Item price | $210.00 | Your figureHigh confidence. You supplied this, so it is exact by definition. |
| Income tax to earn it | $88.51 | StatutoryHigh confidence. This number is the law — federal, FICA and state tax rates are published rates, so the only real risk is staleness. |
Jurisdiction applied
- State:
TX - Local income tax: none selected
Assumptions
- Sales tax is modeled as not applying, which reflects the most common residential treatment. Several states do tax utilities, sometimes at a reduced rate and often with additional franchise or regulatory fees on the bill — enter your own combined rate if yours does.
- Utility-specific surcharges and regulatory riders vary by provider and are not modeled separately; enter your actual all-in bill to capture them.
Sources
What this commitment adds up to
$35,821 over 10 yrsUtilities, every month — $3,582 of income every year, and 2 work weeks of your life.
Year by year
| Year | Spent | Invested instead |
|---|---|---|
| 1 | $2,520 | $2,520 |
| 2 | $5,040 | $5,216 |
| 3 | $7,560 | $8,102 |
| 4 | $10,080 | $11,189 |
| 5 | $12,600 | $14,492 |
| 6 | $15,120 | $18,026 |
| 7 | $17,640 | $21,808 |
| 8 | $20,160 | $25,855 |
| 9 | $22,680 | $30,185 |
| 10 | $25,200 | $34,817 |
Prices and wages are held at today's levels, and the return above is inflation-adjusted to match — consistent by design. The invested-instead line assumes the cash is contributed at the end of each year and left alone; it is an alternative use of the same money, never an extra cost on top.
Your position in the tax system
29.65% on the next dollarEvery extra dollar you earn is taxed at your marginal rate, not your average one — which is why a purchase costs more to fund than a paycheck stub suggests.
Marginal rates are read in gross-income terms: below the standard deduction an extra dollar of pay adds nothing to taxable income, so the true rate there is 0%, not the lowest bracket's. Excludes pre-tax deductions (401(k), HSA), which would lower all three.
Same purchase, different state
TX is #7 of 51Only income tax and sales tax move — the sticker price is held constant, so this is the part of the cost your address actually controls. Spread across all 51: $42, from Alaska to Oregon.
- $299
- Texasyou$299
- $341
Click a state name to compare against somewhere else.
Where every dollar goes
30% never reaches youThe $298.51 you must earn, followed to where it lands. Hover a band to isolate it.
- Federal income tax$65.67
- FICA (Social Security + Medicare)$22.84
- Utilities$210.00
Each tax layer is the extra tax this purchase causes — that layer's tax at your income subtracted from its tax at your income plus the gross-up — so bracket boundaries the purchase straddles are handled correctly rather than smoothed over with an average rate.
Is a raise actually a raise?
you keep 70%A raise arrives on top of everything you already earn, so it is taxed at your marginal rate — not the average rate on your whole salary.
Federal, FICA, state and any local income tax — no pre-tax deductions, benefit changes, or payroll withholding quirks, all of which move the real figure. Moving into a higher bracket never taxes the income below the threshold: only the dollars above it pay the higher rate.