Start with your gross pay and subtract the taxes withheld

Your paycheck after taxes—called your net pay or take-home pay—is what's left after your employer removes federal income tax, Social Security tax, Medicare tax, and any state or local taxes. The easiest way to find this number is to look at your pay stub, which your employer provides with each paycheck. The stub shows your gross pay (what you earned before anything was taken out) and lists each deduction separately, with your net pay at the bottom.

If you want to calculate it yourself or understand where each deduction goes, you need to know your gross pay and the tax rates that explore to you. These rates depend on your income level, where you live, how many dependents you claim, and whether you have other income sources.

Key Takeaways

  • Your net pay is your gross pay minus federal income tax, Social Security tax (6.2%), Medicare tax (1.45%), and any state or local taxes.
  • Federal income tax withheld depends on the W-4 form you filled out with your employer, which accounts for your filing status and dependents.
  • Social Security and Medicare taxes are fixed percentages taken from every paycheck up to an annual earnings cap for Social Security.
  • Your pay stub shows the exact amount withheld for each tax, so you can verify the calculation matches what you expect.
  • Tax withholding changes if you get a raise, change jobs, get married, or have a child—you may need to update your W-4.

Understanding the four main taxes on your paycheck

Federal income tax is the largest deduction for most people. The amount withheld depends on the W-4 form you completed when you started your job. On that form, you told your employer your filing status (single, married, head of household), how many dependents you have, and whether you have other income. Your employer uses this information to calculate how much federal tax to withhold from each paycheck.

Social Security tax is a flat 6.2% of your gross pay, up to a yearly earnings cap. In 2024, you stop paying Social Security tax once you earn $168,600 for the year. After that point, no more Social Security tax comes out of your paychecks for the rest of the year.

Medicare tax is 1.45% of your gross pay with no earnings cap—you pay it on every dollar you earn. If you earn more than $200,000 (or $250,000 if married filing jointly), an additional 0.9% Medicare tax applies to income above that threshold.

State and local income taxes vary by where you live and work. Some states have no income tax at all. Others tax income at rates ranging from about 1% to over 13%, depending on your income level. A few cities also charge local income tax on top of state tax. Check your pay stub or your state's tax authority website to see what rate applies to you.

How to calculate federal income tax withholding

Federal income tax withholding is the hardest piece to calculate by hand because it uses tax tables that change every year. The IRS publishes these tables based on your filing status, pay frequency, and the number of allowances you claimed on your W-4.

The simplest approach is to use the IRS withholding calculator on irs.gov, which asks you questions about your income, filing status, and dependents, then tells you whether your current withholding is correct. If it's not, the calculator tells you what to change on a new W-4 form to adjust it.

If you want to estimate it manually, you can find the IRS tax tables in Publication 15-T on the IRS website. These tables show the tax owed based on your gross pay and filing status. However, the tables are complex and change annually, so most people find the online calculator faster and more accurate.

A step-by-step example of calculating net pay

Let's say you earn $3,000 gross pay in a paycheck, you're single, and you live in a state with a 5% income tax.

Step 1: Calculate Social Security tax. Multiply $3,000 by 0.062 = $186.

Step 2: Calculate Medicare tax. Multiply $3,000 by 0.0145 = $43.50.

Step 3: Calculate state income tax. Multiply $3,000 by 0.05 = $150.

Step 4: Estimate federal income tax. Using the IRS tax tables for a single filer paid weekly, federal tax on $3,000 would be roughly $280 (this varies based on your W-4 entries and exact pay frequency).

Step 5: Add up all deductions. $186 + $43.50 + $150 + $280 = $659.50.

Step 6: Subtract from gross pay. $3,000 − $659.50 = $2,340.50 net pay.

Your actual federal withholding may differ from this estimate because it depends on your specific W-4 entries. Always check your pay stub to see what your employer actually withheld.

Why your withholding might change during the year

Your tax withholding is not fixed for the entire year. It recalculates based on your current pay and the W-4 information you provided. If you get a raise, your withholding increases because you're earning more. If you change jobs, your new employer uses the W-4 you give them, which might be different from your old one.

Life changes also affect withholding. If you get married, have a child, or claim a dependent, you should update your W-4 so your employer withholds the correct amount. If you don't update it, you might owe money at tax time or get a large refund, both of which mean your withholding was wrong during the year.

You can update your W-4 anytime by giving a new form to your payroll department. The change usually takes effect on your next paycheck.

Using your pay stub to verify the calculation

Your pay stub is the most reliable source for your actual net pay because it shows exactly what your employer withheld. Look for these line items: gross pay, federal income tax, Social Security tax, Medicare tax, and state/local tax (if applicable). Add up all the deductions and subtract from gross pay. The result should match the net pay amount on your stub.

If the numbers don't match, check whether your pay stub lists other deductions like health insurance premiums, retirement contributions, or wage garnishments. These also reduce your net pay but are not taxes. Once you account for all deductions, the math should balance.

If you notice an error—for example, if federal tax seems too high or too low—contact your payroll department. They can review your W-4 and check whether the withholding is correct for your situation.

Frequently Asked Questions

Why is my federal withholding different from what I calculated?

Federal withholding depends on your W-4 entries, your pay frequency (weekly, biweekly, monthly), and IRS tax tables that change yearly. Small differences are normal. Large differences usually mean your W-4 doesn't match your actual situation—for example, you claimed too many dependents or didn't account for a second job. Use the IRS withholding calculator to check.

What's the difference between withholding and owing taxes?

Withholding is the money your employer takes out of each paycheck. Owing taxes is what you owe the government after you file your tax return. If you withheld too much, you get a refund. If you withheld too little, you owe the difference. Your paycheck withholding and your final tax bill are separate calculations.

Do I pay Social Security and Medicare tax on bonuses?

Yes. Social Security tax (6.2%) and Medicare tax (1.45%) explore to bonuses just like regular pay. However, Social Security tax stops once you hit the yearly earnings cap, even if the bonus pushes you over it.

Can I change my withholding to get a bigger paycheck?

You can adjust your W-4 to reduce federal withholding, which increases your take-home pay. However, if you reduce withholding too much, you'll owe money when you file your tax return. Use the IRS withholding calculator to find the right amount so you don't underpay.

What if I work in two states during the year?

You may owe income tax to both states, depending on their rules. Some states tax you based on where you work; others tax you based on where you live. Contact both state tax authorities or a tax professional to understand your obligation, because your employer can only withhold for one state at a time.