What Gets Deducted From Your Paycheck?
Every paycheck has two categories of deductions:
- Taxes: Federal income tax, Social Security, and Medicare (FICA). Most states also have income tax, and some cities, such as New York City and Philadelphia, add a local tax on top. In 2026, 13 states take a disability or paid-leave premium from pay, Alaska takes unemployment insurance, and Vermont employers can deduct a small child care contribution.
- Pre-tax deductions: 401(k) contributions, health insurance premiums, FSA/HSA contributions, and similar employer-sponsored benefits reduce your taxable income — and some reduce your FICA base too.
This calculator covers all of the above. Enter your state to see state income tax and SDI; enter your city if you're in NYC, Philadelphia, or a Maryland county to add local taxes.
Federal Income Tax Withholding
Federal income tax is withheld based on your annualized pay after pre-tax deductions, minus the standard deduction for your filing status. The tax on that amount is divided by your number of pay periods.
This method mirrors the IRS percentage method for withholding and is accurate for most employees with a standard W-4 (no Step 3 dependent credits or Step 4 adjustments).
FICA Taxes: Social Security and Medicare
| Tax | Rate | Wage Limit |
|---|---|---|
| Social Security | 6.2% | $176,100 (2025) / $184,500 (2026) / $192,300 (2027) |
| Medicare | 1.45% | No limit |
| Additional Medicare | 0.9% | Withheld on wages over $200,000; owed above $200,000 single / $250,000 joint |
Your employer also pays a matching 6.2% Social Security and 1.45% Medicare — these don't come out of your paycheck but are part of the total cost of employing you.
How to Reduce Your Tax Burden
A few common levers and what they actually do to your paycheck:
- Pre-tax 401(k) contributions: Lower your taxable income, so you pay less in federal and state income tax — but the contribution itself comes out of your paycheck. Your take-home goes down, just by less than the contribution amount. Think of it as a forced savings discount, not a raise.
- FSA / HSA contributions: Same idea. You pay less in income tax and FICA, but the money is diverted to a spending account. Net paycheck is lower, taxes are lower.
- Fix over-withholding (W-4 adjustment): If you get a large refund every year, you've been lending the IRS money interest-free. Updating your W-4 to reduce withholding puts that money in each paycheck instead of waiting until April. This is the one adjustment that genuinely increases take-home without any trade-off.
- Tax credits: Credits like the Child Tax Credit reduce your tax bill at filing. You can also claim them in Step 3 of Form W-4 so less is withheld from each paycheck instead of coming back as a refund.
Frequently Asked Questions
Why is my actual withholding different from this estimate?
Several factors can cause differences: pre-tax benefit deductions (401k, health insurance), W-4 adjustments like dependent credits or additional withholding, multiple jobs, or mid-year changes. This calculator assumes a standard W-4 with no adjustments.
What is the difference between gross and net pay?
Gross pay is your total earnings before any deductions. Net pay (take-home pay) is what's deposited in your account after taxes and other deductions are removed.
How much federal tax is taken out of a paycheck?
Less than the bracket rates suggest, because the standard deduction comes off first and lower brackets apply to the first dollars. For a single filer in 2026, federal income tax is about 6.6% of a $40,000 salary, 10.2% of $75,000, and 16.5% of $150,000. On top of that, Social Security takes 6.2% of pay up to the wage base and Medicare 1.45% of all pay.
Do I pay Social Security tax on all my wages?
No. Social Security tax (6.2%) only applies to wages up to the annual wage base ($176,100 in 2025, $184,500 in 2026, $192,300 in 2027; the 2027 figure is projected). Once you hit that cap, Social Security withholding stops for the rest of the year. Medicare tax (1.45%) has no cap.