How Is Your Take-Home Pay Calculated?
Your take-home pay — also called net pay — is the amount deposited into your bank account after your employer withholds taxes and other deductions from your gross paycheck. For 2026, every American worker pays federal income tax (10%–37%), Social Security (6.2%), and Medicare (1.45%). State income tax varies from 0% in Texas and Florida to up to 13.3% in California.
Standard Deduction 2026
$16,100 for single filers and $32,200 for married filing jointly. This reduces your taxable income before any federal income tax is calculated — meaning your effective rate is always lower than your marginal rate.
How a 401(k) Helps
Every dollar you contribute to a traditional 401(k) reduces your taxable income dollar-for-dollar. Contributing 6% on a $75,000 salary saves roughly $990/year in federal taxes alone. The 2026 limit is $23,500 per year.
Overtime Rules
Under the FLSA, most hourly workers earn 1.5x their regular rate for hours over 40 in a week. California and some states require daily overtime after 8 hours. Use our Overtime calculator above to see your exact after-tax earnings.
Freelance Tax Burden
Self-employed workers pay 15.3% self-employment tax — both the employee and employer share of SS and Medicare. Set aside 25–35% of every payment for taxes. Our Freelance Rate calculator shows exactly what to charge.
Frequently Asked Questions
Why is my take-home pay different from what the calculator shows?
Our calculator estimates based on standard federal and state tax rates. Your actual paycheck may differ due to health insurance premiums, HSA/FSA contributions, union dues, garnishments, or additional W-4 withholding. Always check your actual pay stub for exact figures.
Which states have no income tax?
Nine states have no income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Among taxing states, Arizona (2.5%), Pennsylvania (3.07%), and Indiana (3.05%) have the lowest rates in 2026.
What is the difference between gross pay and net pay?
Gross pay is your salary before any deductions — what's on your job offer. Net pay (take-home pay) is what you actually receive after federal taxes, state taxes, Social Security, and Medicare are withheld. The gap between gross and net is typically 20%–40% depending on your income and state.
How much does a raise actually increase my take-home pay?
Because of progressive taxation, a raise doesn't increase take-home by the full amount. A $5,000 raise might only add $3,000–$3,800 after federal and state taxes. Use our Raise Impact calculator above to see the exact after-tax value before your next negotiation.
How do I convert my hourly wage to an annual salary?
The standard formula: Hourly Rate × 40 hours × 52 weeks = Annual Salary. For example, $25/hour × 40 × 52 = $52,000/year. Our Hourly → Salary calculator above handles this instantly and shows your monthly and biweekly equivalent too.