What Gets Deducted From Your Paycheck?
Every paycheck has two categories of deductions:
- Taxes: Federal income tax, Social Security, and Medicare (FICA). Most states also have income tax, and some cities like New York City and Philadelphia add a local tax on top. Eleven states have mandatory SDI or paid leave contributions.
- Pre-tax deductions: 401(k) contributions, health insurance premiums, FSA/HSA contributions, and similar employer-sponsored benefits reduce your taxable income — and some reduce your FICA base too.
This calculator covers all of the above. Enter your state to see state income tax and SDI; enter your city if you're in NYC, Philadelphia, or a Maryland county to add local taxes.
Federal Income Tax Withholding
Federal income tax is withheld based on your annualized gross pay, minus the standard deduction for your filing status. The result is your estimated taxable income, and the corresponding tax is divided by your number of pay periods.
This method mirrors the IRS percentage method for withholding and is accurate for most employees with a standard W-4 (no Step 3 dependent credits or Step 4 adjustments).
FICA Taxes: Social Security and Medicare
| Tax | Rate | Wage Limit |
|---|---|---|
| Social Security | 6.2% | $176,100 (2025) / $184,500 (2026) |
| Medicare | 1.45% | No limit |
| Additional Medicare | 0.9% | Wages over $200K (single) / $250K (MFJ) |
Your employer also pays a matching 6.2% Social Security and 1.45% Medicare — these don't come out of your paycheck but are part of the total cost of employing you.
How to Reduce Your Tax Burden
A few common levers and what they actually do to your paycheck:
- Pre-tax 401(k) contributions: Lower your taxable income, so you pay less in federal and state income tax — but the contribution itself comes out of your paycheck. Your take-home goes down, just by less than the contribution amount. Think of it as a forced savings discount, not a raise.
- FSA / HSA contributions: Same idea. You pay less in income tax and FICA, but the money is diverted to a spending account. Net paycheck is lower, taxes are lower.
- Fix over-withholding (W-4 adjustment): If you get a large refund every year, you've been lending the IRS money interest-free. Updating your W-4 to reduce withholding puts that money in each paycheck instead of waiting until April. This is the one adjustment that genuinely increases take-home without any trade-off.
- Tax credits at filing: Credits like the Child Tax Credit reduce your tax bill at filing time, not per paycheck — but they can result in a refund or reduce what you owe in April.
Frequently Asked Questions
Why is my actual withholding different from this estimate?
Several factors can cause differences: pre-tax benefit deductions (401k, health insurance), W-4 adjustments like dependent credits or additional withholding, multiple jobs, or mid-year changes. This calculator assumes a standard W-4 with no adjustments.
What is the difference between gross and net pay?
Gross pay is your total earnings before any deductions. Net pay (take-home pay) is what's deposited in your account after taxes and other deductions are removed.
How much federal tax is taken out of a paycheck?
It depends on your income and filing status. For most workers, federal income tax ranges from 10%–22% of gross pay. Add 7.65% for FICA (Social Security + Medicare) and total federal deductions typically range from 17%–30% for middle-income earners.
Do I pay Social Security tax on all my wages?
No. Social Security tax (6.2%) only applies to wages up to the annual wage base ($176,100 in 2025, $184,500 in 2026). Once you hit that cap, Social Security withholding stops for the rest of the year. Medicare tax (1.45%) has no cap.