A salary is a headline number. What actually lands in your bank account every pay period is a smaller number shaped by pre-tax deductions, payroll taxes, and income tax withholding, each working differently. This calculator walks through that chain step by step so you can see exactly where the gap between "gross" and "net" comes from.
The Order Deductions Actually Happen In
Pre-tax deductions come out first: your 401(k) contribution and pre-tax health insurance premium reduce your gross pay before any tax is calculated, which is what makes them "pre-tax." What's left is your taxable wages. From there, Social Security (6.2%) and Medicare (1.45%) are flat payroll taxes applied to those taxable wages, followed by federal and state income tax at the rates you enter. Whatever remains after all five deductions is your net, take-home pay for that period.
Worked Example: $75,000 Salary, Biweekly, 6% 401(k)
Using $75,000 annual salary, biweekly pay (26 periods/year), a 6% 401(k) contribution, $100 per period pre-tax health insurance, a 12% estimated federal rate, and a 4% state rate:
- Gross per period: $75,000 ÷ 26 = $2,884.62
- 401(k) (6%): $2,884.62 × 6% = $173.08
- Taxable wages: $2,884.62 − $173.08 − $100.00 = $2,611.54
- Social Security: $2,611.54 × 6.2% = $161.96
- Medicare: $2,611.54 × 1.45% = $37.87
- Federal tax: $2,611.54 × 12% = $313.38
- State tax: $2,611.54 × 4% = $104.46
- Net pay: $2,611.54 − $161.96 − $37.87 − $313.38 − $104.46 = $1,993.87
- Annualized net pay: $1,993.87 × 26 ≈ $51,840.61, an effective take-home rate of about 69.1% of gross salary
What This Tool Simplifies
Three simplifications are worth being explicit about. First, federal and state tax here are flat effective rates you supply, not the real progressive bracket system, which taxes different slices of income at different rates and depends on filing status, dependents, and credits. Second, Social Security is calculated the same way on every paycheck with no annual wage base cap applied, so high earners will see this tool overstate their Social Security withholding later in the year, once real payroll systems would have stopped applying it. Third, there's no modeling of tax credits, additional Medicare tax on high earners, or other paycheck deductions like HSA contributions or wage garnishments.
None of that makes the tool wrong for its purpose, seeing the mechanics of gross-to-net pay and testing what-if scenarios, but it does mean the dollar figures are a planning estimate, not a substitute for your actual pay stub. If you want a more detailed, bracket-based withholding estimate, the Tax Withholding Calculator is the better tool. And if you're deciding how much to contribute to your 401(k) in the first place, the 401(k) Calculator projects how today's contribution rate grows over your career.
Further reading: Social Security Administration — Contribution and Benefit Base and Wikipedia — Payroll Tax.
Disclaimer: This calculator uses a simplified flat-rate tax model for educational purposes and does not reflect real progressive tax brackets, the Social Security wage base cap, tax credits, or every possible payroll deduction. It is not tax or payroll advice. Consult your pay stub, payroll provider, or a qualified tax professional for exact figures.