Paycheck Calculator: True Take-Home Pay
Gross Salary is a vanity metric; Net Pay is reality. Use this calculator to peel back the layers of taxes, insurance, and retirement contributions to see exactly what lands in your bank account. Optimize your withholdings to avoid giving the IRS an interest-free loan.
Current Data: Using projected 2026 Federal Tax Tables and Standard Deductions (assuming current inflation adjustments).
Section A: Income & Location
Tax Year: 2026
Adjust based on your state's income tax brackets.
Section B: Benefits & Deductions
Group 1: Pre-Tax Benefits
Reduces Federal, State, and FICA taxes
Traditional 401k/403b
Reduces Federal & State taxes (not FICA)
Group 2: Post-Tax & Withholding
Reduces net pay only
Section C: Paycheck Breakdown
Enter your salary information to see your take-home pay breakdown
The Anatomy of Your Paycheck
Your paycheck follows a strict "Waterfall" order. Understanding this hierarchy is the key to lowering your tax bill legally:
- Gross Pay: Your headline salary before any deductions.
- Pre-Tax Deductions (The Shield): Items like Traditional 401(k), HSA, and Medical Insurance are deducted before Federal income taxes are calculated. This lowers your taxable income.
- FICA Taxes (The Unavoidable): A combined 7.65% tax for Social Security (6.2%) and Medicare (1.45%). Note that Social Security tax stops at the annual wage base limit, while high earners may pay an Additional Medicare Tax. Also note that 401(k) contributions do not escape FICA, though HSA contributions made via payroll often do.
- Post-Tax Deductions: Items like Roth 401(k) and garnishments come out after taxes have been paid. They do not lower your current tax bill.
Strategic Scenario: The "401(k) Discount"
Many people hesitate to save for retirement because they fear a smaller paycheck. However, because Traditional 401(k) contributions are pre-tax, the "cost" to your take-home pay is lower than the amount you save.
Scenario A: The "Cash Hoarder"
- Salary: $100,000 (Single Filer)
- 401(k) Contribution: 0% ($0)
- Taxable Income: Higher base.
- The Result: You maximize immediate cash flow, but you pay taxes on every single dollar at your highest marginal rate.
Scenario B: The "Tax Strategist"
- Salary: $100,000
- 401(k) Contribution: 10% ($10,000)
- Tax Savings: ~$2,200 (assuming a ~22% Federal marginal rate; state savings are extra).
- The Result: Your retirement account grows by $10,000, but your paycheck only drops by ~$7,800. The government effectively subsidizes your savings.
Income Intelligence
Q: Why is my bonus taxed so heavily (the "40% Myth")?
A: It feels like a penalty, but it's usually just withholding. Employers often withhold bonuses at a flat statutory Federal rate (typically 22%) plus state and FICA taxes. If your actual tax bracket is lower, you will get the difference back as a refund when you file your tax return.
Q: Does an HSA really lower FICA taxes?
A: Yes, but only if deducted via payroll. Unlike a 401(k), HSA contributions made through a "Section 125" cafeteria plan at work are exempt from the 7.65% FICA tax. This makes the HSA the most tax-efficient account available.
Q: Traditional vs. Roth 401(k): Which is better for my paycheck?
A: A Traditional 401(k) gives you more take-home pay today because it lowers your tax bill now. A Roth 401(k) requires you to pay taxes now, resulting in a smaller current paycheck, but your withdrawals in retirement are tax-free.
Q: What is the difference between "Marginal" and "Effective" tax rate?
A: Your Marginal Rate is the tax percentage on the very last dollar you earned (your highest bracket). Your Effective Rate is the actual percentage of your total income that went to the IRS (usually much lower, thanks to the progressive bracket system).
Q: Why do I owe money at tax time?
A: This usually happens if you have multiple income sources (like a side hustle or interest income) that didn't have taxes withheld, or if your W-4 form claims too many allowances. Use the "Extra Withholding" field in this calculator to set aside money each month to cover the gap.
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This calculator/tool is provided for educational and illustrative purposes only and should not be relied upon as financial, investment, or legal advice. Results are estimates based on your inputs and standard formulas; actual outcomes may vary. Always consult with a qualified financial professional before making any financial decisions.