Paycheck Calculator
Use this calculator to estimate your net pay (take-home pay) after various deductions and taxes are applied to your gross earnings for a single pay period. Understanding your paycheck components is crucial for personal financial planning.
Understanding Your Paycheck
Your paycheck is more than just your hourly wage multiplied by hours worked. It's a detailed breakdown of your earnings and various deductions that lead to your final take-home pay, also known as net pay. Understanding each component is vital for budgeting and financial planning.
Gross Pay
Gross pay is the total amount of money you earn before any taxes or deductions are taken out. This includes your regular wages, salary, commissions, bonuses, and any other compensation you receive from your employer for a specific pay period.
Pre-Tax Deductions
These are amounts subtracted from your gross pay before taxes are calculated. Because they reduce your taxable income, they can lower the amount of income tax you owe. Common pre-tax deductions include:
- 401(k) or 403(b) Contributions: Retirement savings plans.
- Health Insurance Premiums: Your share of the cost for health, dental, or vision insurance.
- Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs): Accounts for healthcare or dependent care expenses.
Taxable Gross
After pre-tax deductions are subtracted from your gross pay, you arrive at your taxable gross income. This is the amount on which most of your income taxes (federal, state, and FICA) will be calculated.
Taxes Withheld
Several types of taxes are typically withheld from your paycheck:
- Federal Income Tax: This is money paid to the U.S. government based on your income, filing status, and W-4 elections. The calculator uses a simplified percentage, but in reality, it's based on progressive tax brackets.
- State Income Tax: Similar to federal income tax, but paid to your state government. Not all states have state income tax.
- Social Security Tax (FICA): This funds retirement, disability, and survivor benefits. The current rate is 6.2% on earnings up to an annual limit (which changes yearly).
- Medicare Tax (FICA): This funds hospital insurance for the elderly and disabled. The current rate is 1.45% on all earnings, with no income limit.
Post-Tax Deductions
These deductions are taken out of your pay after all applicable taxes have been calculated and withheld. They do not reduce your taxable income. Examples include:
- Roth 401(k) Contributions: Retirement savings where contributions are taxed now, but qualified withdrawals in retirement are tax-free.
- Union Dues: Fees paid to a labor union.
- Garnishments: Court-ordered deductions for debts like child support or student loans.
- Charitable Contributions: If deducted directly from your paycheck.
Net Pay (Take-Home Pay)
Net pay is the final amount of money you receive after all taxes and deductions have been subtracted from your gross pay. This is the money that gets deposited into your bank account or is issued as a physical check.
How to Use the Calculator
- Gross Pay per Period: Enter your total earnings for one pay period (e.g., bi-weekly, weekly).
- Federal Income Tax Rate (%): Enter the estimated percentage of federal income tax withheld. You can find this on your pay stub or estimate it based on your tax bracket.
- State Income Tax Rate (%): Enter the estimated percentage of state income tax withheld. If your state has no income tax, enter 0.
- Pre-Tax Deductions: Input the total amount of deductions taken before taxes, such as 401(k) contributions or health insurance premiums.
- Post-Tax Deductions: Input the total amount of deductions taken after taxes, such as Roth 401(k) contributions or union dues.
- Click "Calculate Paycheck" to see a detailed breakdown of your estimated net pay.
Example Calculation
Let's say your gross pay for a bi-weekly period is $2,500. You have $200 in pre-tax deductions (401k, health insurance) and $75 in post-tax deductions (Roth 401k). Your estimated federal tax rate is 18%, and state tax rate is 6%.
- Gross Pay: $2,500.00
- Pre-Tax Deductions: $200.00
- Taxable Gross: $2,500 – $200 = $2,300.00
- Federal Income Tax (18% of $2,300): $414.00
- State Income Tax (6% of $2,300): $138.00
- Social Security Tax (6.2% of $2,300): $142.60
- Medicare Tax (1.45% of $2,300): $33.35
- Total Taxes: $414 + $138 + $142.60 + $33.35 = $727.95
- Net Pay before Post-Tax Deductions: $2,300 – $727.95 = $1,572.05
- Post-Tax Deductions: $75.00
- Net Pay: $1,572.05 – $75 = $1,497.05
This example demonstrates how various deductions and taxes reduce your gross pay to your final net pay.