How a paycheck is calculated
Your take-home pay is your gross pay minus pre-tax deductions (such as 401(k) contributions), federal income tax, payroll taxes (Social Security and Medicare) and any state and local income tax. This calculator estimates each piece using the 2026 federal rules.
Social Security = 6.2% of wages up to $184,500. Medicare = 1.45% of all wages, plus 0.9% above $200,000 (single or head of household) or $250,000 (married filing jointly).
2026 federal figures used
- Standard deduction: $16,100 single, $32,200 married filing jointly, $24,150 head of household.
- Tax brackets: seven rates from 10% to 37%. Only the income inside each bracket is taxed at that bracket’s rate.
- Social Security wage base: $184,500.
These come from IRS Revenue Procedure 2025-32 and the Social Security Administration.
What this estimate leaves out
- State and local taxes vary widely, so you enter a rough effective rate yourself. Several states have no wage income tax.
- Tax credits (child tax credit, education credits), itemized deductions, other income and your Form W-4 withholding choices are not modeled.
- Your actual withholding can differ from your final tax bill, which is settled when you file.
Treat the result as a planning estimate. To see how much home your income supports, try the home affordability calculator.
Frequently asked questions
How is take-home pay calculated?
Start with gross pay, subtract pre-tax deductions such as 401(k) contributions, then subtract federal income tax, Social Security and Medicare, and any state and local income tax. What remains is your take-home pay.
Why does a 401(k) contribution reduce my taxes?
Traditional 401(k) contributions are taken before federal income tax, so they lower your taxable income. They do not reduce Social Security and Medicare taxes, which are still calculated on your full wages.
What is the Social Security wage base?
Social Security tax of 6.2% applies only to the first $184,500 of wages in 2026. Medicare tax of 1.45% applies to all wages, with an extra 0.9% on wages above $200,000 for single filers or $250,000 for joint filers.
Does this include state income tax?
Only as a rate you enter yourself, because state and local rules vary widely. Several states have no tax on wages. Use your effective rate for a closer estimate.
Is this the same as my actual paycheck?
It is an estimate. Your employer’s withholding depends on your Form W-4, other deductions, benefits and local taxes. Your final tax is settled when you file your return.
Sources
- IRS Revenue Procedure 2025-32 (2026 brackets and standard deduction)
- Social Security Administration: 2026 wage base
This tool is for general information and illustration. It is not personalized advice. Confirm the figures with a qualified professional. See our editorial standards.