Salary Take-Home Pay Calculator - Calculate Net Pay After Taxes

Federal Income Tax

Federal income tax uses a progressive bracket system where different portions of your income are taxed at different rates. For 2025, the brackets for single filers are:

• 10% on income up to $11,925
• 12% on income from $11,926 to $48,475
• 22% on income from $48,476 to $103,350
• 24% on income from $103,351 to $197,300
• 32% on income from $197,301 to $250,525
• 35% on income from $250,526 to $626,350
• 37% on income over $626,350

FICA Taxes (Social Security & Medicare)

FICA taxes fund Social Security and Medicare programs. Unlike income tax, these are flat-rate taxes applied to every dollar of earnings:

• Social Security: 6.2% on income up to $176,100 (2025 wage base). Your employer also pays 6.2%.
• Medicare: 1.45% on all income with no cap. Your employer matches this as well.
• Additional Medicare Tax: 0.9% extra on income over $200,000 (single) or $250,000 (married filing jointly). This is employee-only—your employer doesn't match it.

State Income Tax

State income tax varies dramatically across the United States:

• No income tax: Alaska, Florida, Nevada, New Hampshire (interest/dividends only), South Dakota, Tennessee, Texas, Washington, Wyoming
• Flat tax states: Colorado (4.4%), Illinois (4.95%), Indiana (3.05%), Michigan (4.25%), Pennsylvania (3.07%), Utah (4.55%)
• High-tax progressive states: California (up to 13.3%), New York (up to 10.9%), Hawaii (up to 11%), New Jersey (up to 10.75%)

Local/City Income Tax

Some cities and localities impose additional income taxes that further reduce take-home pay:

• New York City: 3.078% to 3.876% depending on income
• Philadelphia: 3.75% for residents, 3.44% for non-residents working in the city
• Ohio cities: Many cities (Cleveland, Columbus, Cincinnati) impose 2-2.5% local taxes
• San Francisco: 0.38% payroll tax (employer-paid but affects compensation)

Let's walk through an example to illustrate how your gross salary becomes take-home pay. Consider a single filer earning $75,000 per year in Texas (no state income tax):

Now compare the same $75,000 salary in California (9.3% state rate for this income):

The difference: The same $75,000 salary yields $3,623 more per year in Texas versus California—that's an extra $302 per month just from state tax differences.

Understanding the difference between pre-tax and post-tax deductions is crucial for optimizing your take-home pay:

Pre-Tax Deductions (Reduce Taxable Income)

• Traditional 401(k)/403(b): Up to $23,500 in 2025 ($31,000 if age 50+). Reduces federal, state, and local taxes.
• Health Insurance Premiums: Employer-sponsored health insurance premiums are typically pre-tax.
• HSA Contributions: Up to $4,300 individual / $8,550 family in 2025. Triple tax advantage.
• Traditional FSA: Up to $3,300 in 2025 for healthcare expenses.
• Dependent Care FSA: Up to $5,000 for childcare expenses.
• Commuter Benefits: Up to $325/month for transit or parking in 2025.

Post-Tax Deductions (No Tax Benefit)

• Roth 401(k): Same limits as traditional, but contributions are after-tax (withdrawals are tax-free).
• Life Insurance: Group term life insurance over $50,000 coverage is taxable.
• Disability Insurance: If you pay premiums post-tax, benefits are tax-free if you become disabled.
• Union Dues: Typically deducted after taxes (no longer federally deductible since 2018).

The Tax Savings Math

If you're in the 22% federal bracket and 5% state bracket, every $100 contributed pre-tax saves you $27 in taxes immediately. A $10,000 annual 401(k) contribution saves approximately $2,700 in taxes while building retirement savings.

❌ Confusing Gross and Net Salary

When job searching, always clarify whether a salary is gross (before taxes) or net (after taxes). Nearly all U.S. job offers quote gross salary. If someone offers you "$5,000 per month," assume it's gross unless specifically stated otherwise.

❌ Forgetting About Employer Benefits

Your gross salary isn't your total compensation. Employer contributions to health insurance, 401(k) matching, and other benefits add significant value. A $70,000 salary with 6% 401(k) match and $7,000 in health coverage is worth $81,200+ in total compensation.

❌ Ignoring State and Local Taxes

When comparing job offers in different locations, state and local taxes can make a huge difference. A $90,000 salary in Seattle (no state tax) provides more take-home than $100,000 in New York City (state + city tax).

❌ Misunderstanding Tax Brackets

Tax brackets are marginal, not total. If you're in the 22% bracket, only income above the 12% threshold is taxed at 22%—not your entire income. Getting a raise that pushes you into a higher bracket doesn't mean all your money is taxed at the higher rate.

❌ Not Adjusting W-4 Withholding

If you consistently get large tax refunds or owe money at tax time, your W-4 withholding needs adjustment. A $3,000 refund means you gave the government a $3,000 interest-free loan all year. Use the IRS Tax Withholding Estimator to optimize your withholding.

What percentage of my salary goes to taxes?

Most Americans pay 20-35% of their gross salary in combined federal, state, and FICA taxes. The exact percentage depends on your income level, state of residence, and filing status. Someone earning $60,000 in Texas might keep 78% of their gross pay, while the same salary in California might yield 72%.

How can I calculate my annual salary from my paycheck?

Multiply your gross pay per period by the number of pay periods: weekly (×52), biweekly (×26), semi-monthly (×24), or monthly (×12). For hourly workers, multiply your hourly rate by hours worked per week, then by 52 weeks.

Why is my first paycheck different from the others?

First paychecks often cover partial pay periods. If you start mid-pay-period, your first check will be smaller. Additionally, some deductions (like health insurance) may have different timing. After a few pay periods, your checks should normalize.

Should I choose traditional or Roth 401(k)?

Traditional 401(k) reduces your taxable income now (higher take-home today), while Roth 401(k) contributions are taxed now but grow tax-free. If you expect to be in a higher tax bracket in retirement, Roth may be better. If you need maximum take-home pay now, traditional provides immediate tax savings.

What's the difference between salary and hourly pay?

Salaried employees receive a fixed amount per pay period regardless of hours worked. Hourly employees are paid based on actual hours worked and are typically entitled to overtime (1.5x pay) for hours over 40 per week. Salaried employees may be exempt from overtime depending on their job duties and salary level.