Educational guide
How to read take-home pay and paycheck withholding
What usually comes out of a US paycheck: federal income tax, FICA, state tax, and pretax deductions — plus a worked $72,000 example.
Last reviewed: 2026-09-16. Estimates only — not financial, tax, or legal advice.
Gross pay is what your job pays you. Take-home pay is what arrives in the bank after several different withholdings. Those withholdings are easy to mash together on a pay stub because they all appear as negative lines. They are not the same tax, they are not computed the same way, and some of them do not care about your filing status at all. If you have ever looked at a stub and thought “they took 22% of everything,” this page is the correction.
The walkthrough below is a US federal overview for a W-2 employee in tax year 2026. It covers federal income tax, FICA (Social Security and Medicare), a simple state-tax placeholder, and pretax deductions such as a traditional 401(k). It is educational. It is not a substitute for your employer’s payroll system, IRS Publication 15-T, or a filed Form 1040.
Four buckets that look alike on a stub
Federal income tax withholding is an installment plan toward the tax you will compute on your annual return. Employers use IRS Publication 15-T and the Form W-4 you gave them. The point of withholding is to come close, not to freeze your exact annual bill on day one. If you change jobs, get a bonus, or file a stale W-4, the withheld amount and the eventual tax can drift apart. That drift is why people receive refunds or write a check in April.
FICA is different. Social Security tax is 6.2% of wages up to an annual wage base. Medicare tax is 1.45% of all wages. There is no “standard deduction” for FICA, and a traditional 401(k) deferral does not reduce the FICA wage. High earners may also owe Additional Medicare Tax of 0.9% above a threshold that depends on filing status. Your employer withholds the employee share; the employer pays a matching Social Security and Medicare amount that never appears in your net pay.
State and local income tax is a third system. Some states have no income tax. Others use brackets, credits, and local add-ons. A single flat percentage is only a sketch. Pretax deductions such as a traditional 401(k), many health premiums, and HSA contributions reduce wages for federal income tax. They usually do not reduce Social Security and Medicare wages. Roth 401(k) contributions are the opposite: they leave federal taxable wages alone and come out after tax.
What our paycheck math is — and is not
The paycheck calculator estimates annual federal income tax with 2026 brackets and the 2026 standard deduction, then divides that annual tax by the number of pay periods. That is a planning model. It is not a line-by-line clone of Publication 15-T’s percentage method or wage-bracket tables. Those tables annualize each paycheck, apply W-4 adjustments, and can treat extra withholding or multiple jobs differently.
Why show an annualized model at all? Because it answers a question people actually ask: “If this salary is my whole year, what is left after federal tax and FICA?” That is a useful ceiling for household budgeting. It will not always match this Friday’s stub, and when it does not, the stub is not “wrong.” The two calculations are solving related problems.
Worked example: $72,000, single, biweekly, no state tax
Assumptions you can copy onto paper:
- Annual gross wages: $72,000
- Filing status: single
- Pay frequency: biweekly (26 periods)
- Traditional 401(k): 0%
- Other pretax amounts: $0
- State income tax: 0% (a no-income-tax state, or a thought experiment)
- Tax year 2026 standard deduction for single filers: $16,100 (IRS Rev. Proc. 2025-32)
Federal taxable income is 72,000 − 16,100 = $55,900. Using the 2026 single brackets:
- 10% on the first $12,400 = $1,240
- 12% on the next $38,000 ($12,400 to $50,400) = $4,560
- 22% on the remaining $5,500 ($50,400 to $55,900) = $1,210
- Federal income tax for the year = $7,010
FICA does not use that $55,900 figure. It uses gross wages, and $72,000 is under the 2026 Social Security wage base of $184,500:
- Social Security: 72,000 × 6.2% = $4,464
- Medicare: 72,000 × 1.45% = $1,044
- Additional Medicare Tax: $0, because wages are below $200,000
Annual take-home pay is 72,000 − 7,010 − 4,464 − 1,044 = $59,482. Divide by 26 and each paycheck is about $2,287.77 on $2,769.23 of gross. The combined federal income tax plus FICA is $12,518, which is about 17.4% of gross — not 22%, even though the last dollar of taxable income sits in the 22% bracket.
| Line | Annual | Biweekly |
|---|---|---|
| Gross | $72,000.00 | $2,769.23 |
| Federal income tax | $7,010.00 | $269.62 |
| Social Security (6.2%) | $4,464.00 | $171.69 |
| Medicare (1.45%) | $1,044.00 | $40.15 |
| Estimated take-home | $59,482.00 | $2,287.77 |
What changes if you defer 6% to a 401(k)
Keep the same $72,000 salary and put 6% into a traditional 401(k). That is $4,320 of pretax deferral. Federal taxable income becomes 72,000 − 4,320 − 16,100 = $51,580. The 22% slice shrinks from $5,500 to $1,180, so federal tax falls from $7,010 to $6,059.60. Social Security and Medicare do not move: they are still $4,464 and $1,044. Net pay becomes 72,000 − 4,320 − 6,059.60 − 4,464 − 1,044 = $56,112.40.
Take-home cash is lower because $4,320 went to retirement. Federal tax is lower because that money left the income-tax base. FICA is unchanged. That pattern is the usual reason a “raise plus 401(k)” stub looks confusing: one deduction is a transfer to your own account, and only some taxes notice it.
Why Friday’s stub can disagree
Payroll systems annualize each check. A bonus check can be withheld as if you earned that bonus every period. Supplemental wages may use a flat withholding rate. Pre-tax benefits can be deducted 24 times a year while salary is paid 26 times. You may have extra withholding from Form W-4 step 4. You may have two jobs whose combined income the first employer cannot see. Any of those will move the federal line without breaking the annual math on this page.
Self-employed people are in a different world. A 1099 worker pays both halves of Social Security and Medicare (the self-employment tax) and usually sends quarterly estimates. This guide does not compute that.
Assumptions and limitations
- W-2 wages only. No self-employment tax, no household-employee rules, no statutory employees.
- Federal income tax is an annual bracket estimate with the standard deduction, then split across pay periods. It is not Publication 15-T withholding.
- No credits (Child Tax Credit, EITC, education credits) and no itemized deductions, AMT, or net investment income tax.
- State tax, when used in the live tool, is a flat percentage of wages after pretax deductions. Real state systems are richer than that.
- Social Security wage base and Additional Medicare thresholds are 2026 figures. Congress and the Social Security Administration update them.
- Pretax “other” amounts are modeled as a single annual total. Your cafeteria plan may be more detailed.
Sources and methodology
Ordinary federal brackets and the 2026 standard deduction are taken from IRS Revenue Procedure 2025-32. Employee Social Security and Medicare rates are the long-standing FICA rates: 6.2% and 1.45%. The 2026 Social Security wage base used here is $184,500. Additional Medicare Tax is 0.9% above $200,000 for single filers and $250,000 for married filing jointly, reconciled on the annual return even though employers often begin withholding at $200,000 of wages from a single employer. For the official withholding method, see IRS Publication 15-T. For the bracket walkthrough that sits underneath the federal line, see How US federal income tax brackets work.