Your take-home pay is what actually lands in your bank account after taxes and deductions. The math isn't hard once you know the order things come off — here's the step-by-step, with a worked example.
The order taxes and deductions come off
- 1. Start with gross pay. Your salary, or hourly rate × hours. Convert to annual to make the math easy — the hourly-to-salary calculator does this.
- 2. Subtract pre-tax deductions. Traditional 401(k), HSA, FSA, and health premiums reduce your taxable income. See pre-tax vs after-tax deductions.
- 3. Subtract the standard deduction to get taxable income, then apply the federal tax brackets.
- 4. Add state income tax (zero in nine states).
- 5. Add FICA — 6.2% Social Security (up to the wage base) + 1.45% Medicare. Note: FICA is on gross wages and is not reduced by your 401(k). See what FICA tax is.
- 6. What's left is your take-home pay.
A worked example: $75,000 salary
Take a $75,000 salary, single filer, no deductions. Federal income tax applies to income above the standard deduction; on top of that you pay state tax (if any), plus 6.2% Social Security and 1.45% Medicare on the full wage. Depending on your state, take-home lands somewhere around $57,000–$60,000 a year — roughly a 20–24% effective rate.
Effective vs marginal rate
Your marginal rate is the tax on your next dollar; your effectiverate is total tax ÷ gross — always lower, because the lower brackets tax earlier dollars less. When people say "I'm in the 22% bracket," their effective rate is usually far below that.
Or just use the calculator
Doing it by hand is great for understanding; for an exact number, the paycheck calculator runs all six steps instantly for your salary, state, filing status and deductions. Compare states on the take-home-pay-by-state ranking.