How to Calculate Take-Home Pay (2026 Salary Guide)

Congratulations on the job offer! But before you sign the contract for that $80,000 salary, you need to know: how much money will actually hit your bank account?

The gap between your “Gross Salary” (the big number on your offer letter) and your “Net Pay” (what you spend) can be shocking. Often 20% to 35% disappears before you see a dime.

In this guide, we’ll break down exactly where that money goes and how to estimate your true earnings using our Free Salary Calculator.

The Paycheck Formula

$Net \ Pay = Gross \ Pay - (Taxes + FICA + Deductions)$

Let’s look at each component.

1. Federal Income Tax (Progressive)

Federal taxes are “progressive.” This means you pay higher rates only on income above certain thresholds.

2026 Projected Brackets (Single Filer):

• 10% on income up to ~$11,925
• 12% on income ~$11,925 to ~$48,475
• 22% on income ~$48,475 to ~$103,350
• …and so on.

Example: If you earn $50,000, you don’t pay 22% on the whole amount. You pay 10% on the first chunk, 12% on the middle chunk, and 22% only on the tiny slice above $48,475. This is called your Marginal Tax Rate.

2. FICA Taxes (Flat Rate)

Unlike income tax, FICA (Federal Insurance Contributions Act) is a flat percentage for everyone:

• Social Security: 6.2% (capped at ~$168,600 income)
• Medicare: 1.45% (unlimited)
• Total FICA: 7.65% of your gross pay.

3. State & Local Taxes

Depending on where you live, this can be $0 or substantial.

• 0% States: Texas, Florida, Nevada, Washington, etc.
• High Tax States: California (up to 13%+), New York, Hawaii.

4. Voluntary Deductions (Pre-Tax)

These are the “good” deductions because they lower your tax bill.

• 401(k) / 403(b): Retirement savings.
• Health Insurance Premiums: Medical/Dental/Vision.
• HSA / FSA: Health savings accounts.

Money put here is subtracted from your Gross Pay before Federal Income Tax is calculated.

Example: The $75,000 Salary

Let’s run a $75,000 salary (Single, living in Colorado with 4.4% state tax) through our Salary Calculator.

• Gross Pay: $75,000 / year
• Standard Deduction: -$15,000 (Tax Free)
• Taxable Income: $60,000

Estimated Taxes:

• Federal Tax: ~$8,200
• FICA (7.65%): ~$5,737
• State Tax (4.4%): ~$3,300
• Total Tax: ~$17,237 (Effective Rate: ~23%)

Take Home Pay:

• Annual: $57,763
• Monthly: $4,813
• Bi-Weekly: $2,221

Why “Per Paycheck” Accuracy Matters

Most people budget monthly, but get paid bi-weekly (26 times a year). This creates two “magic months” each year where you receive three paychecks.

• Budgeting Tip: Build your monthly budget based on 2 paychecks (4 weeks of pay). Then use the two “extra” paychecks for savings, debt payoff, or vacations. This creates an automatic safety buffer.

How Pre-Tax Deductions Save You Money

Pre-tax deductions reduce your taxable income, not just your take-home pay. The savings compound across federal, state, and FICA taxes.

401(k) Example:

If you earn $75,000 and contribute 6% ($4,500) to a traditional 401(k):

• Taxable income drops to $70,500
• Federal tax savings: ~$990 (at 22% bracket)
• State tax savings: ~$198 (at 4.4% in Colorado)
• Total tax savings: ~$1,188 per year

You invested $4,500 but it only reduced your paycheck by $3,312. The government effectively subsidized $1,188 of your retirement savings.

HSA (Health Savings Account):

HSA contributions are triple-tax-advantaged: tax-deductible going in, tax-free growth, and tax-free withdrawals for medical expenses. The 2026 contribution limit is $4,300 for individuals and $8,550 for families. Maxing out an HSA at $4,300 saves roughly $1,000 in taxes at the 22% bracket plus 7.65% FICA.

Comparing Job Offers: Total Compensation

Salary alone doesn’t determine your take-home pay. Two $80,000 offers can produce very different paychecks:

Factor	Offer A	Offer B
Base Salary	$80,000	$80,000
State	Texas (0%)	California (9.3%)
401k Match	6% match	No match
Health Insurance	$100/month premium	$400/month premium
Estimated Annual Take-Home	~$62,000	~$53,000

The $9,000 difference comes entirely from state taxes and benefits costs. Always calculate net pay when comparing offers, not gross salary.

The Self-Employment Tax Trap

Self-employed workers pay both the employee and employer portions of FICA, totaling 15.3% (12.4% Social Security + 2.9% Medicare). On top of that, you owe federal and state income tax.

Example: $100,000 in self-employment income:

• Self-employment tax (15.3% on 92.35% of income): ~$14,130
• Federal income tax (after deductions): ~$12,000
• State tax (varies): ~$0 to $10,000+
• Take-home: $64,000-$74,000 depending on state

This is why freelancers should set aside 25-35% of every payment for taxes. Quarterly estimated tax payments (due April 15, June 15, September 15, January 15) prevent a massive bill at filing time.

Calculate Your Number Now

Stop guessing. Use our Salary Calculator to customize your inputs: add your 401(k) contribution, select your state, and see your exact Weekly, Bi-Weekly, and Monthly take-home pay instantly.

Frequently Asked Questions

What percentage of my salary goes to taxes?

For most US workers earning between $50,000 and $100,000, total tax withholding (federal + state + FICA) ranges from 20% to 35% of gross pay. FICA alone takes 7.65%. Federal income tax depends on your bracket (10-37%), and state taxes range from 0% (Texas, Florida) to 13%+ (California). Your effective tax rate is almost always lower than your marginal bracket because of progressive taxation and the standard deduction.

How do I calculate take-home pay from an hourly wage?

Multiply your hourly rate by hours worked per pay period to get gross pay. Then subtract estimated taxes: federal (use your tax bracket), FICA (7.65%), and state tax. For a quick estimate, multiply your hourly rate by 2,080 (52 weeks times 40 hours) for annual gross, then subtract 25-30% for taxes. A $25/hour wage produces roughly $52,000 gross and approximately $38,000-$39,000 net in a mid-tax state.

Why is my first paycheck smaller than expected?

First paychecks are often smaller because payroll cycles are fixed. If you started mid-period, you’re only paid for the days you actually worked in that period, not the full two weeks or month. Also, your W-4 withholding may be set to a default that withholds more than necessary. Review your W-4 after your first paycheck and adjust if your withholding is too high.

Should I claim more allowances to increase my paycheck?

Claiming more allowances (or adjusting your W-4 to reduce withholding) increases your per-paycheck take-home pay but reduces your tax refund or could result in owing money at tax time. The IRS W-4 form was redesigned in 2020 to use dollar amounts instead of allowances. Use the IRS Tax Withholding Estimator to find the right balance. Ideally, you want to owe nothing and receive no refund, meaning the government withheld exactly the right amount all year.