| Gross Pay: | $'+gross.toFixed(2)+' |
| – Federal Tax ('+(fedRate*100)+'%): | $'+fedTax.toFixed(2)+' |
| – State Tax ('+(stateRate*100)+'%): | $'+stateTax.toFixed(2)+' |
| – FICA (Social Security/Medicaid): | $'+ficaTax.toFixed(2)+' |
| – Other Deductions: | $'+otherDed.toFixed(2)+' |
| Total Net Pay: | $'+netPay.toFixed(2)+' |
Calculator Use
This net pay calculator is designed to help employees and business owners estimate the actual "take-home" amount of a paycheck after all mandatory and voluntary deductions are removed. By inputting your gross earnings and estimated tax rates, you can better plan your personal budget and understand how taxes impact your financial bottom line.
Whether you are negotiating a new salary or reviewing your current pay stub, this tool provides a clear breakdown of where your money goes.
- Gross Pay Per Period
- The total amount earned before any taxes or deductions are taken out (e.g., your base salary or hourly wages multiplied by hours worked).
- Federal and State Tax Rates
- The percentage of your income withheld for government taxes. These vary based on your filing status, location, and income bracket.
- FICA (Federal Insurance Contributions Act)
- A mandatory payroll tax that funds Social Security and Medicare. In the U.S., the standard employee rate is 7.65%.
- Other Deductions
- Fixed dollar amounts removed for health insurance premiums, 401(k) retirement contributions, or other employer-sponsored benefits.
How It Works
The net pay calculator follows a standard accounting sequence to reach the final figure. The basic formula is:
Net Pay = Gross Pay – (Federal Tax + State Tax + FICA) – Voluntary Deductions
- Step 1: Determine the Gross Pay for the specific pay period (Weekly, Bi-weekly, etc.).
- Step 2: Calculate percentage-based taxes based on the Gross amount.
- Step 3: Add the standard FICA rate (7.65% for most U.S. workers) to the other tax percentages.
- Step 4: Subtract the total tax amount and fixed deductions from the Gross Pay.
Calculation Example
Example: Let's assume an employee earns $5,000 per month. They live in a state with a 5% income tax, fall into a 12% federal tax bracket, and pay $200 for health insurance.
Step-by-step solution:
- Gross Pay = $5,000.00
- Federal Tax (12%) = $600.00
- State Tax (5%) = $250.00
- FICA Tax (7.65%) = $382.50
- Health Insurance = $200.00
- Total Reductions = $600 + $250 + $382.50 + $200 = $1,432.50
- Net Pay = $5,000 – $1,432.50 = $3,567.50
Common Questions
What is the difference between Gross and Net Pay?
Gross pay is the total amount you earn before any deductions. Net pay is the "actual" amount that is deposited into your bank account after taxes, insurance, and retirement contributions are removed.
Why is my Net Pay lower than I expected?
Most people underestimate the impact of payroll taxes like FICA (Social Security and Medicare) and State taxes. Additionally, if you contribute heavily to a 401(k) or have expensive health insurance premiums, your net pay will be significantly lower than your gross salary.
Does filing status affect net pay?
Yes, your federal tax rate is directly influenced by your filing status (Single, Married Filing Jointly, Head of Household). Choosing the correct status is vital for accurate estimations using the net pay calculator.