How the result is calculated
Your employer cannot know your tax bill, so it estimates it every payday from two forms: the federal Form W-4 and, in most states, a state certificate. The estimate is the withholding, and the rules for making it are published: the IRS's Publication 15-T for federal income tax, and each state's employer guide for its own. The calculator applies both to one paycheck, then the deductions you chose.
adjusted wageannual wage + Step 4(a) − Step 4(b) − Step 2 amount
federal per paycheck(C + D × (adjusted wage − A) − Step 3) ÷ pay periods + Step 4(c)
take-homegross − pre-tax − federal − FICA − state − after-tax
- annual wage
- this paycheck's taxable wages times the pay periods in a year
- Step 2 amount
- 8,600, or 12,900 for married filing jointly, unless the Step 2 box is ticked
- C, D, A
- the row of the Publication 15-T schedule the adjusted wage falls in: its tentative amount, its rate and its floor
- Step 3
- the yearly credits on the W-4, spread across the paychecks
Each tax is charged on a different slice of pay, and that is where most pay stubs and calculators part company. A traditional 401(k) deferral comes out before federal income tax but not before Social Security and Medicare. Section 125 deductions, health premiums, a health FSA and HSA contributions through payroll, come out before both. Most states follow the federal treatment, but Pennsylvania and New Jersey tax 401(k) deferrals, and California and New Jersey tax HSA contributions.
Worked example
| Item | Amount | How it is obtained |
|---|---|---|
| Gross pay | $2,884.62 | 75,000 ÷ 26 |
| Annual wage | $75,000.00 | 2,884.62 × 26, before rounding |
| Less the Step 2 amount | $66,400.00 | 75,000 − 8,600 |
| Federal income tax | $295.00 | 5,800 + 22% × (66,400 − 57,900) = 7,670 a year, ÷ 26 |
| Social Security | $178.85 | 6.2% of 2,884.62 |
| Medicare | $41.83 | 1.45% of 2,884.62 |
| Take-home pay | $2,368.94 | every two weeks, the whole paycheck in Texas, Florida or Nevada |
| Item | Amount | How it is obtained |
|---|---|---|
| Annual wage | $75,000.00 | the same paycheck, annualised |
| Standard deduction | $5,706.00 | DE 44 Method B, Table 3 |
| Tax on $69,294 | $3,220.33 | the 2026 withholding rate table |
| Exemption allowance credit | $168.30 | one regular allowance |
| California withholding | $117.39 | 3,052.03 a year, ÷ 26 |
| State Disability Insurance | $37.50 | 1.3% of all wages, with no ceiling |
| Take-home pay | $2,214.05 | $154.89 less than with no state income tax |
| Item | Amount | How it is obtained |
|---|---|---|
| Gross pay | $1,425.00 | 40 × 30 + 5 × 45 |
| Federal income tax | $143.69 | Worksheet 1A on 74,100 a year |
| New York withholding | $66.12 | NYS-50-T-NYS weekly table, single, no allowances |
| Disability and paid family leave | $6.76 | 0.60 a week and 0.432% of wages |
| Social Security and Medicare | $109.01 | 7.65% of 1,425 |
| Take-home pay | $1,099.42 | for the week |
Reading the result
The headline is what lands in your account each payday. Beneath it every line that comes out of the paycheck opens on its own derivation: the federal line shows each step of Worksheet 1A with your figures, and the state line lists each step of the state's own formula. The table puts this paycheck beside the year, which differs where a cap bites: Social Security stops once the year's wages reach 184,500, so a high earner's last paychecks are larger. The last derivation sets the year's federal withholding against the tax the same Form W-4 implies, which is roughly the refund or the bill to expect in April.
What changes the result
The Form W-4
The 2020 and later form has no allowances. Step 2 is for a second job or a working spouse: ticking it switches to schedules with half-width bands and drops the standard deduction allowance, so each job withholds as if it were half the household's income. Step 3 takes your dependents' credits off the year's withholding, and Steps 4(a) to 4(c) add other income, deductions beyond the standard deduction and a flat extra amount.
The state
Forty-one states and the District of Columbia tax wages, and almost every one publishes its own withholding formula, with its own certificate, statuses and allowances. Some annualise and use their income tax brackets; others print tables per pay period, as New York and Montana do; Pennsylvania withholds a flat 3.07% of all wages. Several also withhold contributions of their own, such as California SDI, New York paid family leave, Washington paid leave and WA Cares. Each state's page lists its method, its source and its contributions.
Pay frequency
Withholding is computed on the annualised paycheck and divided back, so the same salary withholds the same year's federal tax whether it is paid weekly or monthly. Per-period tables can round differently by a cent or two, and a cap reached mid-year shifts money between paychecks.
What is not included
- Local income taxes. New York City and Yonkers, Philadelphia, Ohio and Kentucky cities, Maryland and Indiana counties all withhold their own.
- Supplemental pay. Bonuses and commissions are often withheld at a flat 22% federally and at a state's supplemental rate.
- Employer-specific deductions, such as life insurance, parking, union dues the employer collects or a garnishment you have not entered.
- Year-to-date effects, such as a payroll system catching up after a pay change or a mid-year W-4.
Using the result
Check a new pay stub against it line by line: a gap usually points to a deduction, a form or a local tax the stub has and the calculator does not. If the year-end line shows a large refund or bill, change the W-4, by ticking Step 2 for two jobs or entering a Step 4(c) amount, and see the paycheck move. For the full return, with credits a W-4 cannot express, use the tax refund calculator; to compare countries rather than states, use the take-home pay calculator.