Paycheck Calculator 2026: How to Calculate Your Take-Home Pay (Federal, State & Local Taxes)
Wondering why your paycheck is so much smaller than your salary? This guide breaks down every deduction on a US pay stub — federal income tax, Social Security, Medicare, state tax, and local tax — with worked examples for California, New York, and Texas. By the end, you will know exactly how to calculate your net pay from any gross salary.
Part 1: How a US Paycheck Is Calculated
Gross Pay vs. Net Pay
Your gross pay is the total amount you earn before any deductions. If your annual salary is $75,000 and you are paid biweekly, your gross pay per paycheck is:
$75,000 ÷ 26 pay periods = $2,884.62 gross per paycheck
Your net pay (take-home pay) is what you actually receive after all deductions. It is typically 60-75% of your gross pay, depending on your state, filing status, and pre-tax contributions.
The Five Types of Deductions
Every US paycheck deduction falls into one of five categories:
- Federal income tax: Withheld based on your W-4 elections, filing status, and the federal tax brackets. This is your largest deduction in most cases.
- FICA taxes (Social Security + Medicare): A flat 7.65% for most workers — 6.2% for Social Security (up to the wage base limit) and 1.45% for Medicare (no cap).
- State income tax: Withheld if you live or work in a state that levies income tax. Nine states have no income tax at all.
- Local/city tax: Some cities like New York City, Philadelphia, and Detroit charge an additional local income tax on top of state tax.
- Pre-tax and post-tax deductions: Health insurance premiums, 401(k) contributions, HSA/FSA contributions, life insurance, and union dues.
Pre-Tax vs. Post-Tax Deductions
The order in which deductions are applied matters significantly for your final take-home pay:
Example: If you earn $3,000 gross and contribute $300 to a 401(k) (pre-tax), your taxable income is $2,700 — not $3,000. At a 22% marginal tax rate, that saves you $66 per paycheck in federal tax alone.
Part 2: Federal Income Tax Brackets 2026
The US federal income tax system is progressive — you do not pay one rate on your entire income. Instead, your income is split into brackets, and each bracket is taxed at its own rate.
2026 Federal Tax Brackets — Single Filers
| Tax Rate | Taxable Income |
|---|---|
| 10% | $0 – $11,925 |
| 12% | $11,926 – $48,475 |
| 22% | $48,476 – $103,350 |
| 24% | $103,351 – $197,300 |
| 32% | $197,301 – $250,525 |
| 35% | $250,526 – $626,350 |
| 37% | Over $626,350 |
Last verified: 25 September 2026. Sources: IRS 2026 federal tax tables and state revenue authorities. Confirm with the relevant state tax agency before filing.
2026 Federal Tax Brackets — Married Filing Jointly
| Tax Rate | Taxable Income |
|---|---|
| 10% | $0 – $23,850 |
| 12% | $23,851 – $96,950 |
| 22% | $96,951 – $206,700 |
| 24% | $206,701 – $394,600 |
| 32% | $394,601 – $501,050 |
| 35% | $501,051 – $751,600 |
| 37% | Over $751,600 |
How to Calculate Federal Tax — Worked Example
Let us calculate federal tax for a single filer earning $85,000 in 2026:
Notice that although the 22% bracket applies, the effective tax rate is only 11.9% — because lower brackets are taxed at 10% and 12%. This is the most misunderstood aspect of the US tax system: moving into a higher bracket does not mean your entire income is taxed at that rate.
The Standard Deduction
The standard deduction reduces your taxable income automatically — you do not need to itemize. For 2026:
- Single: $15,750
- Married filing jointly: $31,500
- Head of household: $23,625
If your itemized deductions (mortgage interest, state and local taxes up to $10,000, charitable donations) exceed the standard deduction, you should itemize instead. Most Americans take the standard deduction.
Part 3: FICA Taxes — Social Security & Medicare
FICA (Federal Insurance Contributions Act) taxes are mandatory for all W-2 employees and most self-employed workers. They fund Social Security retirement benefits and Medicare healthcare.
Social Security Tax
If you earn $176,100 or more, the Social Security portion of FICA stops at $176,100. This is why very high earners have a lower effective FICA rate than middle earners.
Medicare Tax
FICA Calculation Example
For an employee earning $75,000 per year:
Part 4: State Payroll Tax — California vs. New York vs. Texas
State tax is the biggest differentiator in your take-home pay. A $80,000 salary in Texas leaves you with significantly more than the same salary in California or New York.
California Payroll Tax
California has the highest state income tax in the US, with rates ranging from 1% to 13.3%. California also charges SDI (State Disability Insurance) at 1.2% on wages up to a cap.
| Tax Rate | Single Taxable Income |
|---|---|
| 1% | $0 – $10,756 |
| 2% | $10,757 – $25,499 |
| 4% | $25,500 – $40,245 |
| 6% | $40,246 – $55,866 |
| 8% | $55,867 – $70,606 |
| 9.3% | $70,607 – $360,659 |
| 10.3% | $360,660 – $432,787 |
| 11.3% | $432,788 – $721,314 |
| 12.3% | Over $721,314 |
| 13.3% | Plus Mental Health Services Tax on income over $1M |
New York Payroll Tax
New York State income tax ranges from 4% to 10.9%. New York City residents pay an additional city tax of 3.078% to 4.4% — this is on top of state tax.
| Tax Rate | NY State Single Taxable Income |
|---|---|
| 4% | $0 – $8,500 |
| 4.5% | $8,501 – $11,700 |
| 5.25% | $11,701 – $13,900 |
| 5.5% | $13,901 – $80,650 |
| 6% | $80,651 – $215,400 |
| 6.85% | $215,401 – $1,077,550 |
| 9.65% | $1,077,551 – $5,000,000 |
| 10.3% | $5,000,001 – $25,000,000 |
| 10.9% | Over $25,000,000 |
Texas Payroll Tax
Texas has no individual income tax. Your paycheck deductions are limited to federal income tax and FICA only. This is why Texas is popular with remote workers and freelancers.
Take-Home Pay Comparison: $85,000 Salary
Here is what a single filer earning $85,000 takes home annually in each state:
| Deduction | California | New York City | Texas |
|---|---|---|---|
| Gross Salary | $85,000 | $85,000 | $85,000 |
| Federal Income Tax | −$10,149 | −$10,149 | −$10,149 |
| FICA (7.65%) | −$6,503 | −$6,503 | −$6,503 |
| State Income Tax | −$3,847 | −$3,361 | $0 |
| SDI (CA only) | −$1,020 | — | — |
| NYC City Tax | — | −$1,769 | — |
| Annual Take-Home | $63,481 | $63,218 | $68,348 |
| Biweekly Paycheck | $2,441 | $2,431 | $2,628 |
The Texas paycheck is $187 more per pay period than California — that is $4,868 per year more in your pocket, just from living in a no-income-tax state.
Use the free US Paycheck Calculator to compute your exact take-home pay for any salary and state.
State-Specific Calculators
California Paycheck Calculator
includes CA state tax, SDI, and all CA deductions
New York Paycheck Calculator
includes NY state tax and NYC city tax
Texas Paycheck Calculator
federal and FICA only (no state tax)
Part 5: Step-by-Step — Calculate Any Paycheck
Follow this exact sequence to calculate your net pay from any gross salary:
- Step 1: Start with gross annual salary. Divide by pay periods (26 biweekly, 24 semimonthly, 12 monthly) to get gross per paycheck.
- Step 2: Subtract pre-tax deductions. 401(k) contributions, health insurance premiums, HSA contributions. This gives you adjusted gross income for withholding.
- Step 3: Calculate FICA. Apply 6.2% Social Security (up to $176,100) and 1.45% Medicare (no cap) to gross wages.
- Step 4: Calculate federal income tax. Apply the standard deduction, then calculate tax through each bracket. Divide annual tax by pay periods for per-paycheck withholding.
- Step 5: Calculate state income tax. Use your state's brackets. If no state income tax (TX, FL, NV, WA, etc.), skip this step.
- Step 6: Calculate local tax. If you live in NYC, Philadelphia, or another city with local tax, apply the city rate to taxable income.
- Step 7: Subtract all deductions from gross. The result is your net (take-home) pay per paycheck.
Complete Worked Example: $85,000 in California, Biweekly
Over a full year, that is $65,581 take-home on an $85,000 salary — or $77.16 for every $100 earned.
Part 6: How to Increase Your Take-Home Pay Legally
1. Maximize Pre-Tax Deductions
- 401(k) contributions: Up to $24,500 in 2026 (under 50). Every dollar reduces your taxable income.
- Health insurance premiums: Employer-sponsored plans are pre-tax under Section 125.
- HSA contributions: Up to $4,400 (individual) or $8,750 (family) in 2026. Triple tax advantage: tax-deductible, grows tax-free, withdrawn tax-free for medical expenses.
- FSA contributions: Up to $3,400 for healthcare FSAs. Use it or lose it, so only contribute what you will spend.
2. Adjust Your W-4 Withholding
If you consistently get a large tax refund, you are giving the government an interest-free loan. Adjust your W-4 to reduce withholding and increase your monthly take-home pay. Use the IRS Tax Withholding Estimator to find the right settings.
3. Choose the Right Filing Status
Your filing status significantly impacts your tax bracket and standard deduction:
- Single: Standard deduction $15,750
- Married filing jointly: Standard deduction $31,500 (double the single amount)
- Head of household: Standard deduction $23,625 — available if you are unmarried with a dependent
4. Relocate to a No-Income-Tax State
Nine states have no individual income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Moving from California to Texas on an $85,000 salary saves approximately $4,868 per year in state taxes alone.
5. Contribute to a Dependent Care FSA
If you pay for childcare, a dependent care FSA lets you set aside up to $5,000 pre-tax for childcare expenses. At a 22% marginal tax rate plus 7.65% FICA, that saves approximately $1,483 per year.
Frequently Asked Questions
How do I calculate my take-home pay?
Start with your gross annual salary. Subtract federal income tax (based on your tax bracket and filing status), FICA taxes (6.2% Social Security up to the wage base limit, 1.45% Medicare), state income tax (if your state has one), and any pre-tax deductions like 401(k) contributions or health insurance premiums. The result is your net annual pay — divide by pay periods for your per-paycheck amount.
What is the federal income tax bracket for 2026?
The 2026 federal income tax brackets for single filers are: 10% on income up to $11,925, 12% on $11,926 to $48,475, 22% on $48,476 to $103,350, 24% on $103,351 to $197,300, 32% on $197,301 to $250,525, 35% on $250,526 to $626,350, and 37% on income above $626,350. Married filing jointly thresholds are approximately double.
Which US states have no income tax?
Nine US states have no individual income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you live or work in one of these states, your paycheck deductions are limited to federal taxes and FICA only.
How much is FICA tax on my paycheck?
FICA (Federal Insurance Contributions Act) tax has two components: Social Security tax at 6.2% of gross wages up to the annual wage base limit ($176,100 for 2026), and Medicare tax at 1.45% of all wages with no cap. High earners earning above $200,000 (single) or $250,000 (married) pay an additional 0.9% Medicare surcharge. Total FICA is typically 7.65% for most employees.
What is the difference between gross and net pay?
Gross pay is your total salary before any deductions — this is the number in your employment contract. Net pay (take-home pay) is what lands in your bank account after federal tax, state tax, FICA, health insurance premiums, retirement contributions, and other deductions are subtracted. Net pay is typically 60-75% of gross pay depending on your state and filing status.
How does California payroll tax differ from New York?
California has a progressive state income tax ranging from 1% to 13.3%, plus SDI (State Disability Insurance) at 1.2% on wages up to a cap. New York State income tax ranges from 4% to 10.9%, and New York City residents pay an additional city tax of 3.078% to 4.4%. Texas has no state income tax at all, so Texas paychecks only have federal and FICA deductions.
Try Our Free Calculators
Every tool below runs 100% in your browser. No sign-up, no data upload, no tracking.
Disclaimer: This article provides general information about US federal and state payroll taxes. Tax rates and brackets change annually. This is not tax advice. Consult a qualified tax professional for advice specific to your situation. Information is current as of September 2026.