Free Payroll Calculator
Use this simple payroll calculator to estimate your net pay per pay period. Enter your gross pay, estimated tax withholdings, and any deductions to see your take-home pay.
Your Estimated Paycheck Breakdown:
Gross Pay: $0.00
Pre-Tax Deductions: $0.00
Taxable Gross Pay: $0.00
Federal Income Tax: $0.00
State Income Tax: $0.00
Social Security Tax (6.2%): $
Medicare Tax (1.45%): $0.00
Total Taxes Withheld: $0.00
Post-Tax Deductions: $0.00
Estimated Net Pay: $0.00
Understanding Your Paycheck: A Guide to Payroll
A payroll calculator helps you understand how your gross earnings are transformed into your net, or take-home, pay. It's essential for budgeting and financial planning to know where your money goes before it hits your bank account.
What is Gross Pay?
Gross pay is the total amount of money you earn before any taxes or deductions are taken out. If you're an hourly employee, it's your hourly rate multiplied by the number of hours worked. For salaried employees, it's your annual salary divided by the number of pay periods in a year (e.g., 26 for bi-weekly, 12 for monthly).
Key Deductions and Taxes Explained:
- Pre-Tax Deductions: These are amounts taken out of your gross pay before taxes are calculated. Common examples include contributions to a 401(k) or 403(b) retirement plan, health insurance premiums, and Flexible Spending Account (FSA) contributions. Because these reduce your taxable income, they can lower your overall tax burden.
- Taxable Gross Pay: This is your gross pay minus any pre-tax deductions. Your income taxes (federal and state) are calculated based on this amount.
- Federal Income Tax: This is money withheld from your paycheck by the federal government. The amount depends on your income, filing status, and the allowances you claim on your W-4 form. Our calculator uses an estimated fixed amount for simplicity, but in reality, it's based on tax brackets.
- State Income Tax: Similar to federal income tax, this is withheld by your state government. Not all states have state income tax, and rates vary significantly.
- Social Security Tax (OASDI): This is part of the Federal Insurance Contributions Act (FICA) tax. For 2024, employees contribute 6.2% of their gross wages up to an annual earnings limit of $168,600. This tax funds retirement, disability, and survivor benefits.
- Medicare Tax (HI): Also part of FICA, employees contribute 1.45% of all gross wages, with no earnings limit. This tax funds hospital insurance for the elderly and disabled.
- Post-Tax Deductions: These are amounts taken out of your pay after all taxes have been calculated and withheld. Examples include union dues, garnishments, Roth 401(k) contributions (which are taxed upfront), and some types of disability insurance.
What is Net Pay?
Net pay, often called "take-home pay," is the amount of money you receive after all taxes and deductions have been subtracted from your gross pay. It's the actual amount that gets deposited into your bank account or paid to you via check.
Example Calculation:
Let's use the default values in the calculator:
- Gross Pay: $2,000
- Pre-Tax Deductions: $100 (e.g., 401k contribution)
- Taxable Gross Pay: $2,000 – $100 = $1,900
- Estimated Federal Tax: $200
- Estimated State Tax: $50
- Social Security Tax: $1,900 * 0.062 = $117.80
- Medicare Tax: $1,900 * 0.0145 = $27.55
- Total Taxes: $200 + $50 + $117.80 + $27.55 = $395.35
- Post-Tax Deductions: $20 (e.g., union dues)
- Net Pay: $2,000 (Gross) – $100 (Pre-Tax) – $200 (Federal) – $50 (State) – $117.80 (SS) – $27.55 (Medicare) – $20 (Post-Tax) = $1,484.65
This calculator provides a helpful estimate. For precise figures, always refer to your official pay stubs or consult with a payroll professional or tax advisor.