How to Calculate Take-Home Pay From Gross Pay

To calculate take-home pay, start with gross pay for one paycheck. Subtract pre-tax deductions, then Social Security and Medicare, federal income tax withholding, state and local income tax, and finally any after-tax deductions. What is left is your take-home pay.

On a $60,000 salary paid every two weeks, a single filer in Texas starts with $2,307.69 of gross pay and takes home $1,938.08. The paycheck calculator does all of this for you in any state. The steps below show what it is doing, so you can check a pay stub or work it out yourself.

Step 1: Find gross pay for one paycheck

Gross pay is everything you earned in the pay period before anything comes out.

For a salary, divide the yearly amount by the number of paychecks:

How often you are paid	Paychecks a year	Gross pay on $60,000
Weekly	52	$1,153.85
Every two weeks	26	$2,307.69
Twice a month	24	$2,500.00
Monthly	12	$5,000.00

For hourly pay, multiply your wage by your hours, then add overtime at 1.5 times your wage and any tips, commission or bonus paid in that check. The hourly paycheck calculator handles overtime and more than one pay rate.

Step 2: Subtract pre-tax deductions

Some deductions come out before tax is figured, which lowers the wages you are taxed on. The common ones are:

• A traditional 401(k), which lowers federal and most state taxable wages but not Social Security or Medicare wages.
• Health, dental and vision premiums under a cafeteria plan, which lower all of them.
• HSA and FSA contributions taken through payroll.

For the rest of this guide, say our Texas worker puts 6% of pay into a 401(k) and pays $100 a paycheck for health insurance:

Line	Amount
Gross pay	$2,307.69
401(k), 6%	$138.46
Health insurance	$100.00
Wages for Social Security and Medicare	$2,207.69
Wages for federal income tax	$2,069.23

The two taxable wage figures differ because the 401(k) is still taxed for Social Security and Medicare. The FAQ on whether a 401(k) reduces taxable income covers the details.

Step 3: Subtract Social Security and Medicare

Together these are called FICA. In 2026, Social Security is 6.2% of wages up to $184,500 for the year, and Medicare is 1.45% of all wages. Medicare adds another 0.9% once one employer has paid you more than $200,000 in the year.

• Social Security: 6.2% x $2,207.69 = $136.88
• Medicare: 1.45% x $2,207.69 = $32.01

The FICA guide explains the wage base and the extra Medicare tax.

Step 4: Subtract federal income tax withholding

This is the only step that needs a table. Employers use the percentage method in IRS Publication 15-T, which turns your Form W-4 into a dollar amount. With a 2020 or later W-4, single, no boxes checked, it works like this:

1. Annualize federal taxable wages: $2,069.23 x 26 = about $53,800.
2. Subtract the $16,100 standard deduction for single filers: $37,700.
3. Apply the 2026 brackets: 10% on the first $12,400 is $1,240, and 12% on the remaining $25,300 is $3,036. Total $4,276.
4. Divide by 26 paychecks: $164.46.

Credits for children in W-4 Step 3 come off the yearly figure before you divide, and any extra withholding from Step 4(c) gets added to each check. The W-4 guide shows how each step moves the number.

Step 5: Subtract state income tax and state programs

Texas has no income tax on wages, so this line is zero for our example. Eight other states also skip it; the FAQ on which states have no income tax lists them.

Most states do tax wages, and some add payroll programs such as state disability insurance. The same worker in California, with the same 401(k) and health plan, has $53.63 of state income tax and $28.70 of SDI taken out of each check. Each state’s rules are on its own page, which you can find from the states list.

Step 6: Subtract local income tax

Some cities, counties and school districts charge a local income tax. They are common in Ohio, Pennsylvania, Michigan, Maryland, Indiana and Kentucky, and New York City and Yonkers have one too. If yours does, it comes out here. Most are a flat percent of wages.

Step 7: Subtract after-tax deductions

Roth 401(k) contributions, union dues, some life insurance and wage garnishments come out last. They do not change any tax, so you just subtract them.

The full example

Here is the Texas paycheck with every step in place, next to the plain version with no deductions:

Line	No deductions	6% 401(k) + $100 health
Gross pay	$2,307.69	$2,307.69
401(k)	$0.00	$138.46
Health insurance	$0.00	$100.00
Federal income tax	$193.08	$164.46
Social Security	$143.08	$136.88
Medicare	$33.46	$32.01
Take-home pay	$1,938.08	$1,735.88

The deductions add up to $238.46, but take-home pay only drops by $202.20. The rest is tax you no longer pay. Put another way, the 401(k) and health premiums cost less than their face value because they come out first.

Take-home pay after a 401(k) contribution

People often ask how much a 401(k) really costs per paycheck. In this example, the 6% contribution alone ($138.46) lowers federal withholding from $193.08 to $176.46. Take-home pay falls from $1,938.08 to $1,816.23, so the $138.46 going into your account costs $121.85 of spending money. In a state with income tax the gap is wider, because state tax usually drops too. Pennsylvania is the exception: it taxes 401(k) contributions.

Shortcuts and when they fail

A common rule of thumb is that 15% to 30% of gross pay goes to taxes. That gets you in the right area, but it misses a lot:

• Pre-tax deductions change the answer more than most people expect.
• Each child under 17 on your W-4 can cut federal withholding by up to $2,200 a year.
• High-tax states and local taxes can take several more percent.
• A bonus check is often withheld at a flat 22% federal rate, so it looks very different. The bonus tax calculator handles those.

If you want the percentage for your own pay, the guide on what percentage of your paycheck goes to taxes has a table by salary. For the labels on a real stub, read gross pay vs net pay. The methodology page writes out every formula the calculator uses.