How to Calculate Your Take-Home Pay in the US

Gross pay and net pay

Gross pay is the number in your offer letter, before anything is taken out. Net pay, often called take-home pay, is what arrives in your account after taxes and deductions. The gap between them has two kinds of items.

The first kind is taxes. Federal income tax, Social Security and Medicare apply to almost everyone. Most states add a state income tax, though a handful, such as Texas, Florida and Washington, do not tax wages. Some cities and counties add their own tax too.

The second kind is deductions you choose or agree to. Retirement contributions, health insurance premiums, a health savings account, commuter benefits. These reduce your paycheck, but many of them also reduce your tax, which we will see in a moment.

Step 1: Federal income tax

Federal tax is worked out in two moves. First, you subtract the standard deduction from your income. For 2026, that is $16,100 for a single filer, $32,200 for married couples filing jointly and $24,150 for a head of household. What is left is your taxable income.

Second, that taxable income is taxed in slices. This surprises many people. The US has a progressive system, which means each slice of income is taxed at its own rate. For a single filer in 2026, the first $12,400 is taxed at 10%, the slice from $12,400 to $50,400 at 12%, and the slice from $50,400 to $105,700 at 22%, and so on up through 24%, 32%, 35% and 37%.

So moving into a higher bracket does not make all your income taxed at the higher rate. Only the part above the line is.

• 10% of the first $12,400 = $1,240
• 12% of the next $38,000 (up to $50,400) = $4,560
• 22% of the remaining $8,500 = $1,870
• Federal income tax in total = $7,670

Here it is for our $75,000 earner. Taxable income is $75,000 minus $16,100, which is $58,900. Then:

Step 2: Social Security and Medicare

These two are often called FICA taxes. Social Security takes 6.2% of your wages, up to a yearly limit, which is $184,500 in 2026. Medicare takes 1.45% of all your wages, with an extra 0.9% on high earners above $200,000 for a single filer.

On $75,000, Social Security is $4,650 and Medicare is $1,087.50. Together they come to $5,737.50. Notice that these do not depend on the standard deduction or your bracket, and a 401(k) contribution does not reduce them. Your employer pays a matching amount on top, which you never see on your stub.

Step 3: State and local tax

States differ a lot. Nine states do not tax wages at all. Others charge a flat rate, such as 4% or 5%. Some have brackets that climb as high as 13%, as California does. A few states also charge a small payroll tax for disability or family leave, and some cities, like New York City, add a local income tax.

For our first example we use a state with no income tax, so this line is zero. In the free take-home pay calculator you can choose any of the 50 states and Washington, DC to see the real figure for where you live.

The result: what lands in the bank

Adding up our example: federal income tax $7,670, Social Security $4,650 and Medicare $1,087.50 is $13,407.50 in total. Subtract that from $75,000 and you get about $61,593 a year.

That is about $5,133 a month, about $2,369 every two weeks if you are paid 26 times a year, and about $1,185 a week. As an hourly wage, $75,000 is about $36.06 an hour on a 40-hour week.

Your effective tax rate, the total tax divided by the gross pay, is about 17.9%. Your federal rate alone is about 10.2%, even though your top bracket is 22%. That gap between the top rate and the effective rate is exactly the slice system at work.

What a 401(k) really costs you

A traditional 401(k) contribution comes out of your pay before income tax is calculated. That is why saving into one hurts less than you expect.

Say you put in 6% of $75,000, which is $4,500 a year. Your taxable income drops to $75,000 minus $4,500 minus $16,100, which is $54,400. Federal tax becomes $1,240 plus $4,560 plus 22% of $4,000, which is $880, a total of $6,680. That is $990 less than before.

Your Social Security and Medicare stay at $5,737.50, because a 401(k) does not reduce them. After the contribution and taxes, your take-home pay is about $58,083. So you put $4,500 into retirement, but your pay fell by only about $3,510. The tax saving paid for 22% of it.

If your employer matches part of your contribution, it is free money on top. Contributing enough to get the full match is one of the safest returns you can find. For the details of how much you can put in and how a match builds over the years, see our 401(k) calculator.

Other things that change your paycheck

Beyond the big items, several smaller ones can move your net pay.

• Health insurance premiums. If taken before tax, they lower your taxable income, just like a 401(k).
• Health savings account contributions. These can also be pre-tax, and they are often exempt from FICA when taken through payroll.
• Pre-tax commuter benefits and flexible spending accounts.
• Roth 401(k) contributions. These are taken after tax, so they do not lower your income tax now, but qualified withdrawals later are tax-free.
• Union dues, life insurance and wage garnishments.
• Bonuses. Employers often withhold federal tax on bonuses at a flat supplemental rate of 22%. This is only a withholding method. Your real tax is settled when you file your return.

If you work extra hours, see how overtime changes the picture with our overtime pay calculator. And if you wonder what your pay looks like on a different schedule, the paycheck frequency converter turns weekly, bi-weekly, semi-monthly and monthly pay into one another.

Why your paycheck may not match the calculation

A calculator gives you a close estimate of your real tax. Your actual paycheck can differ because of how your employer withholds. The Form W-4 you give your employer tells them how much federal tax to hold back. If it says you are single with no adjustments, they hold back based on standard tables.

Withholding is a prepayment. If too much was held back, you get a refund when you file. If too little, you may owe tax. Neither is a gain or a loss in itself, but a large refund means you lent the government money for free all year, and a large bill can be a nasty surprise.

If your refund or bill is usually large, consider updating your W-4. The IRS provides a free tax withholding estimator on its website to help you do this.

Five ways to use this information

Once you can trace your paycheck, you can use it.

1. Compare job offers on take-home pay, not gross pay. A higher salary in a high-tax state can leave you with less than a lower salary in a no-tax state.
2. Decide your 401(k) contribution knowing its real cost, which is lower than the headline number.
3. Build your budget on net pay, and divide it by how often you are paid.
4. Check your pay stub against the calculator when you start a new job. If a line looks wrong, ask payroll.
5. Revisit your numbers each January, when the IRS adjusts brackets and limits.

How filing status changes the answer

Your filing status decides your standard deduction and the width of your tax brackets. The main choices are single, married filing jointly, and head of household.

Married couples filing jointly get a standard deduction of $32,200 in 2026 and brackets that are about twice as wide, so each partner is taxed as though they had half the combined income. Head of household is for unmarried people who support a qualifying dependent, and it sits between the two, with a $24,150 deduction.

To see the effect, imagine our $75,000 earner were head of household instead of single. The standard deduction rises from $16,100 to $24,150, so taxable income falls to $50,850. The first $17,700 is taxed at 10%, and the rest at 12% up to $67,450. Federal income tax comes to $1,770 plus $3,978 (12% of $33,150), which is $5,748, about $1,900 less than the single filer pays. Same salary, noticeably different take-home pay, purely because of filing status.

Hourly workers and overtime

If you are paid by the hour, your yearly income is not a fixed number, so it helps to think in pay periods. Multiply your hourly rate by your hours for the period to find gross pay, then apply the same steps. A rough way to compare is to multiply your hourly rate by 2,080, which is 40 hours for 52 weeks.

Overtime adds a twist. In the US, many hourly workers earn 1.5 times their rate for hours beyond 40 in a week. That extra pay is taxed like any other income, and because withholding is calculated as though each paycheck were repeated all year, a big overtime week can look heavily taxed on the stub. It is not a special rate. It is the withholding formula leaning on one large check. Over the year it settles out when you file.

To plan around a typical week, use the overtime pay calculator with your own rate and hours.

Turning your take-home pay into a budget

Once you know the real number, build the budget on that, not on the gross. A simple starting point is to split take-home pay into needs, wants and saving or debt repayment, and adjust the shares to suit your life.

On $5,133 a month, a 50/30/20 split would be about $2,567 for needs, $1,540 for wants and $1,027 for savings and debt. Your city, family and goals will move those shares, and that is fine. The value is in having a number to start from.

If you are paid every two weeks, remember that two months a year have three paychecks. Many people use those extra paychecks to pay down debt or build savings, since the monthly budget already works without them.

Questions people ask

Sources and further reading

• IRS – Tax inflation adjustments for 2026
• Social Security Administration – Contribution and benefit base
• IRS – Tax withholding estimator