Statistics Mislead, but Your Paycheck Doesn’t Lie: End Gender Pay Gap by Starting Your Own Business

Guest post by David Anderson (learn more about the author at the end of the article):

March was Women’s History Month, a 31-day celebration of the strides females have made in the workplace. But as April settles in and tax time forces Americans to review their income, women may not feel much like cheering. Because they’ll discover that, on average, a man makes more after paying taxes than a woman does before Uncle Sam takes a cut of her salary.

If your gross pay is less than a male coworker’s net pay, that’s grossly unfair. You can accept your fate or push your boss for a raise. Or you can end the gender gap one woman at a time by starting your own business.

Entrepreneurship holds many rewards for women — flexible hours and freedom to work at home, among them. But it also gives you the opportunity to make as much as — or more than — a man and to lower your taxes at the same time.

So if you need a financial nudge to make 2013 the year of becoming your own boss, here are some facts worth considering:

Paycheck Math

If you made $50,000 last year, your male co-worker probably earned $65,000, based on the statistic — quoted in Facebook COO Sheryl Sandberg’s bestselling book “Lean In” — that, on average, a woman makes 77 cents for every dollar made by a man.

Let’s take a look at what this means in terms of your paycheck.

Your male coworker who earned $65,000 would pay $12,279.85 in U.S. federal income taxes, based on current tax rates. His after-tax annual income would be $52.721 — $2,721 more than your gross salary.

Your after tax salary on an income of $50,000 would be $41,470.15 — about $11,257 less than your male coworker’s net pay.

The figures are based on current tax rates. The U.S. government takes 10 percent of the first $8,700 you earn, 15 percent of the next $26,649 and 25 percent of the next $50,299. Your actual taxes may be less, depending on your number of dependents and other deductions.

A Trillion Reasons to Join the Ranks of Female Entrepreneurs

While unlikely to be the primary motivating factor in starting your own business, entrepreneurship brings with it the opportunity for fair, equal pay among women and men. If you have experienced the injustice of gendered salary discrepancies you may find resolution in business ownership.

Currently women own 30 percent of U.S. businesses, according to the latest figures available from the U.S. Census Bureau. Companies owned by women generate about $1.2 trillion in annual sales.

Going into business for yourself may prove an optimal maneuver in bypassing the gendered salary discrepancies that continue to dominate today’s corporate world. This may be one reason – among many – why more and more women are entering the field of entrepreneurship. In fact, as pointed out in a recent article in Business Cash Advance, the number of women-owned businesses has increased by 54 percent over the last 15 years.

Skewed Statistics

Some of the feel-good stories published during Women’s History Month may have led you to believe that you are in a gender-neutral occupation. But look beyond the cheerful declarations and take a closer look at the actual numbers quoted in the articles.

For instance, a March 20, 2013 Forbes article by Susan Adams proudly entitled “In Tech, Women are Now Paid as Much as Men, Study Finds” declares, in its opening sentence, that “the gender pay gap has disappeared in the tech sector.” She pointed to extensive analysis conducted by technology-guru Dice to support her contention.

Good news, right? Not so fast. As Adams’ article begins to unfold, some troubling facts are revealed.

For one, men in technology are still making more than women, plain and simple. According to Dice’s salary survey published January 2013, last year women holding positions in the technology industry made an average of $87,500, whereas men working in the same field earned an average of $95,900.

Senior vice president of Dice, Tom Silver, attempts to glaze over the gender wage disparity, claiming that if levels of education and experience, along with position titles, are factored in, women and men in technology are actually earning equal pay

Since when does $87,500 equal $95,900? Simple math tells us that women in technology are still earning $8,400 less than men working in the same industry.

Entrepreneurship Not a Magic Button to Wealth

Owning your own business makes it possible to achieve pay equity, but success is not guaranteed. To date, only one-quarter of women-owned businesses have passed the $50,000 mark, according to Count Me in For Women’s Economic Independence.

And another study found that female entrepreneurs produce sales that are about 25 percent lower than businesses owned by men.

Becoming an entrepreneur does even the playing field. It allows you to set your own rules — and to break down the gender barriers to success.

About the Author

David Anderson has marketed large brands, including Wal-Mart and Readers Digest, and Gore-Tex, as well as thousands of mom-and-pop companies in the United Kingdom and North America. You can circle David on Google+ or follow him on Twitter.

Community Member

Women on Business Community Member

More Posts


  1. says

    well here in my country women receive more pay then men in some fields of work. If the situation is different in Europe then sorry about that.

  2. says

    Let’s not forget that you should also be ready for the challenges. It may sound nice to be an entrepreneur or marketer, but the reality bites for those unprepared.