How Your Paycheck Is Calculated

🏦 Federal Income Tax

The U.S. uses a progressive tax system with 7 brackets for 2025: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Only the income within each bracket is taxed at that rate — not your entire salary. Your standard deduction ($15,000 single / $30,000 married / $22,500 HOH) reduces your taxable income before brackets are applied.

🏠 State Income Tax

State taxes vary widely. 9 states charge no income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming). Others range from flat rates around 3% to progressive brackets up to 13.3% in California. Your state of residence determines which rates apply.

🤝 Social Security (FICA)

You pay 6.2% of your wages toward Social Security, up to the 2025 wage base of $176,100. Once your earnings exceed that cap, no additional Social Security tax is withheld for the rest of the year. Your employer also pays a matching 6.2%.

🏥 Medicare Tax

Medicare tax is 1.45% on all wages with no income cap. If you earn more than $200,000 (single) or $250,000 (married), you also pay an Additional Medicare Tax of 0.9% on the excess. Your employer matches the base 1.45% but not the additional tax.

Frequently Asked Questions

How accurate is this paycheck calculator?

This calculator uses 2025 federal tax brackets, standard deductions, and state tax rates to provide a close estimate of your take-home pay. It does not account for pre-tax deductions (401k, health insurance), tax credits, local taxes, or other withholdings that may apply to your specific situation. For exact withholding amounts, consult your employer's payroll department or a tax professional.

What is the standard deduction for 2025?

For the 2025 tax year, the standard deduction is $15,000 for Single filers, $30,000 for Married Filing Jointly, and $22,500 for Head of Household. These amounts are automatically applied in our calculator before computing your federal income tax.

Which states have no income tax?

Nine states have no state income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you live in one of these states, your take-home pay will be higher since you only pay federal taxes and FICA.

How is Social Security tax calculated?

Social Security tax is 6.2% of your gross wages, up to the 2025 wage base limit of $176,100. Once your year-to-date earnings exceed this amount, Social Security tax stops being withheld. This means the maximum Social Security tax you can pay in 2025 is $10,918.20.

What's the difference between gross pay and net pay?

Gross pay is your total earnings before any deductions. Net pay (take-home pay) is what you actually receive after federal income tax, state income tax, Social Security, Medicare, and any other deductions are subtracted. Your net pay is always less than your gross pay.