US Salary & Paycheck Calculator

How Federal Income Tax Brackets Work

The United States uses a progressive marginal tax system. This means your income is divided into portions — called brackets — and each portion is taxed at a different rate. You never pay the top rate on your entire income.

For 2025, there are seven federal income tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. A single filer earning $80,000 does not pay 22% on all $80,000. They pay 10% on the first $11,925, 12% on income from $11,925 to $48,475, and 22% only on income from $48,475 to $80,000. Their effective rate — the actual percentage of gross income paid in tax — is well below 22%.

The income thresholds for each bracket are indexed for inflation each year by the IRS. The 2025 figures shown in this calculator are based on IRS Revenue Procedure 2024-40.

What Is FICA? Social Security and Medicare Taxes

FICA stands for the Federal Insurance Contributions Act. It funds two programs: Social Security (retirement, disability, and survivors' benefits) and Medicare (health coverage for people 65 and older).

In 2025, employees pay 6.2% Social Security tax on wages up to the annual wage base of $176,100. Once your wages pass this threshold for the year, no more Social Security tax is withheld — a benefit for higher earners. Medicare is 1.45% with no wage cap. High earners also owe an Additional Medicare Tax of 0.9% on wages above $200,000 (single filers) or $250,000 (married filing jointly).

Your employer matches your Social Security and Medicare contributions — so the total cost to the employment system is 12.4% for Social Security and 2.9% for Medicare. If you are self-employed, you pay both the employee and employer share (15.3% combined, though you can deduct half).

How to Read Your W-4 (Employee's Withholding Certificate)

The W-4 tells your employer how much federal income tax to withhold from each paycheck. The redesigned 2020 W-4 has five steps:

• Step 1: Personal information and filing status.
• Step 2: Multiple jobs or spouse works — check the box if you or your spouse hold more than one job. This prevents significant under-withholding.
• Step 3: Claim dependent credits — $2,000 per qualifying child under 17, $500 per other dependent.
• Step 4a: Other income (not from jobs) — dividends, retirement income, etc. Adding this increases withholding so you aren't surprised at tax time.
• Step 4b: Deductions — if you plan to itemize above the standard deduction, enter the excess. This reduces withholding.
• Step 4c: Extra withholding per pay period — useful if you have side income or want a larger refund.

If you have a W-4 from before 2020, it uses the allowance system. Each allowance you claimed reduced your withholding by a set amount ($4,300 in 2025). The pre-2020 format is no longer issued, but employers must honour existing pre-2020 forms.

State Income Tax Differences

State income tax varies enormously across the US. Nine states have no income tax on wages: Alaska, Florida, Nevada, New Hampshire (as of 2025), South Dakota, Tennessee, Texas, Washington, and Wyoming — though some tax investment income.

Flat-rate states like Colorado (4.4%), Illinois (4.95%), and Pennsylvania (3.07%) apply the same rate to all income. Most states use progressive brackets, with California topping out at13.3% on income over $1 million — the highest state income tax rate in the country.

Some states (California, New Jersey, New York, Hawaii, Rhode Island, and Washington) also levy state disability insurance (SDI) or paid family and medical leave (PFML) premiums on employees. This calculator includes those where applicable.

Pre-Tax vs. Post-Tax Deductions

Pre-tax deductions reduce your gross pay before federal income tax (and usually state income tax) is calculated. The most common pre-tax deductions are traditional 401(k) contributions, Health Savings Account (HSA) contributions, Flexible Spending Account (FSA) elections, and employer-sponsored health, dental, and vision insurance premiums (under a Section 125 cafeteria plan). Every dollar you put into a traditional 401(k) saves you money in taxes now — for a 22% bracket taxpayer, a $5,000 contribution saves $1,100 in federal income tax immediately.

Post-tax deductions come out of your pay after all taxes are calculated. The most important is the Roth 401(k) — you pay tax on the money now, but qualified withdrawals in retirement are completely tax-free. Other post-tax deductions include certain life insurance premiums and court-ordered wage garnishments.

How to Calculate Your Take-Home Pay

1. Start with your gross wages for the pay period.
2. Subtract pre-tax deductions (401k, HSA, FSA, health premiums) to arrive at your federal taxable wages.
3. Apply the federal income tax withholding tables (IRS Pub 15-T) based on your W-4 and filing status.
4. Calculate FICA: 6.2% SS (capped at $176,100 annual wages) + 1.45% Medicare (uncapped) + 0.9% Additional Medicare Tax if applicable.
5. Apply state income tax using your state's brackets or flat rate and standard deduction.
6. Apply any local or city tax.
7. Subtract any post-tax deductions.
8. The result is your net take-home pay.

Frequently Asked Questions

What is the Social Security wage base for 2025?

The Social Security wage base for 2025 is $176,100 (up from $168,600 in 2024). Social Security tax of 6.2% (employee) stops once your wages hit this threshold for the calendar year.

Can I change my W-4 at any time?

Yes. You can submit a new W-4 to your employer at any time. Changes typically take effect on the next payroll after your employer processes the form. There is no limit to how many times you can update your W-4. It is wise to review your W-4 whenever you have a major life change — marriage, divorce, a new child, or a significant change in income.

Is this calculator accurate for self-employed workers?

This calculator is designed for W-2 employees. Self-employed individuals and independent contractors pay self-employment tax (15.3% on net self-employment income up to the SS wage base, plus 2.9% Medicare above that), and are also required to make quarterly estimated tax payments. A dedicated self-employment calculator gives more accurate results for that scenario.