How your take-home pay is calculated
Your paycheck starts with your gross pay, your salary divided by the number of pay periods or your hourly rate times your hours. From that, your employer withholds:
- Federal income tax, using the IRS 2026 percentage-method tables (Publication 15-T) and the information on your Form W-4: filing status, the Step 2 checkbox, dependents and extra withholding.
- Social Security: 6.2% of your wages, up to the 2026 wage base of $184,500.
- Medicare: 1.45% of all wages, plus an additional 0.9% on wages above $200,000.
- State income tax, if your state has one.
- Pre-tax deductions such as 401(k) contributions and health insurance premiums, which lower your taxable income.
Example
A single filer earning $60,000 a year, paid every two weeks in Texas, gets $2,307.69 gross per paycheck. Federal withholding is $193.08, Social Security $143.08 and Medicare $33.46, leaving $1,938.08 in take-home pay, about $50,390 a year. The same paycheck in Illinois (4.95% flat tax) would be about $1,823.85.
State income taxes
Nine states don't tax wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Several states use a single flat rate in 2026, including Arizona (2.5%), Colorado (4.4%), Georgia (4.99%), Illinois (4.95%), Indiana (2.95%), Kentucky (3.5%), Michigan (4.25%), North Carolina (3.99%), Pennsylvania (3.07%) and Utah (4.5%); the calculator applies them automatically. For states with graduated brackets, such as California or New York, enter your approximate rate.
Ways to increase your take-home pay
- Review your W-4: claiming the children and dependents you're entitled to lowers withholding.
- If you get a big refund every year, you may be over-withholding.
- Pre-tax 401(k) and HSA contributions reduce the income tax you pay now.
Paid by the hour? Track your time with Hours Calculator. Paying down debt? Try Credit Card Payoff Calculator.
Frequently Asked Questions
How much is taken out of my paycheck for taxes?
It depends on your income, filing status and state. Social Security and Medicare take 7.65% of most paychecks; federal and state income tax vary. For a $60,000 single filer in a state without income tax, total withholding is about 16% of gross pay.
Why is my paycheck different from this estimate?
Employers may withhold for local taxes, benefits, wage garnishments or other deductions, and state withholding formulas include exemptions this calculator doesn't model.
Does a 401(k) contribution reduce my taxes?
Traditional 401(k) contributions lower your federal (and most states') taxable income, but you still pay Social Security and Medicare on them.
What is the Social Security wage base for 2026?
$184,500. Once your wages for the year pass that amount, Social Security tax stops being withheld until January.
How do I change my withholding?
Give your employer a new Form W-4. Use Step 4(c) to withhold extra, or claim dependents in Step 3 to withhold less.