How your paycheck is calculated
Every US paycheck goes through the same deduction sequence: start with gross pay, subtract pre-tax deductions (401k, health insurance), calculate FICA (Social Security + Medicare), then calculate federal income tax, then state income tax. What remains is your net take-home pay.
Federal income tax (2026 brackets)
The US uses seven progressive tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. You do not pay your marginal rate on all income — only on the slice of income that falls in each bracket. A single filer earning $75,000 pays 10% on the first $11,925, 12% on the next $36,550, and 22% on the remainder — an effective rate of about 14.5%.
FICA — Social Security and Medicare
Social Security is 6.2% on wages up to $184,500 (2026 wage base). Once you hit that cap, Social Security withholding stops for the year — a mid-year pay bump for high earners. Medicare is 1.45% with no cap. High earners pay an additional 0.9% Medicare surtax on wages above $200,000 (single) or $250,000 (married). Your employer pays a matching 7.65% on top — this never appears on your check but is a real cost of employing you.
Nine states with no income tax
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming have no state income tax. If you live in one of these states, your take-home pay is significantly higher than an equivalent salary in high-tax states like California (top rate 13.3%) or New York (top rate 10.9%). A $100,000 salary in Texas takes home roughly $3,500–4,000 more per year than the same salary in California.
Why pre-tax 401(k) contributions matter
401(k) contributions come out before federal and state income tax is calculated, reducing your taxable income dollar-for-dollar. A $10,000 annual contribution in the 22% federal bracket saves $2,200 in federal taxes alone. The contribution still gets hit by FICA (Social Security and Medicare) since those are calculated on gross wages before 401k deductions.
Frequently asked questions
What is the difference between biweekly and semi-monthly pay?
Biweekly means every two weeks — 26 paychecks per year. Two months each year will have three paychecks. Semi-monthly means twice per month on fixed dates (e.g. 1st and 15th) — exactly 24 paychecks per year. Both result in the same annual gross, but per-paycheck amounts differ: biweekly paychecks are slightly smaller but you get two extra per year.
Why does my W-4 affect my paycheck?
Your W-4 tells your employer how much federal income tax to withhold. The current W-4 (redesigned in 2020) uses filing status and adjustments rather than allowances. Claiming the wrong status or not completing optional steps 2–4 can lead to over- or under-withholding — resulting in a tax bill or large refund at filing. This calculator uses your filing status as a proxy for the W-4 standard withholding.
Does this calculator include local taxes?
No — local income taxes (New York City, Philadelphia, Maryland counties, Detroit, etc.) are not included. Residents of these cities should reduce their net pay estimate by their local tax rate. NYC residents, for example, pay an additional 3.078%–3.876% city tax on top of state tax.
What is the 2026 401(k) contribution limit?
The 2026 annual 401(k) employee contribution limit is $23,500 (up from $23,000 in 2025). Workers age 50 and older can contribute an additional $7,500 catch-up contribution, for a total of $31,000. These limits apply to traditional and Roth 401(k) plans combined.