Gross Pay vs Take-Home Pay

Gross pay is what you earn before anything is taken out. Take-home pay (net pay) is what actually lands in your account after deductions. The gap is usually 20–35% of gross, depending on your income, where you live, and your benefit elections.

take-home pay = gross pay − pre-tax deductions − taxes withheld − post-tax deductions

What comes out of a US paycheck

1. Pre-tax deductions

Taken before tax is calculated, so they also lower your taxable income: traditional 401(k) or 403(b) contributions, HSA and FSA contributions, and health, dental, and vision premiums paid through a Section 125 plan.

2. Federal income tax withholding

A running prepayment toward your annual federal tax bill. Your employer uses the IRS Publication 15-T method and the information on your Form W-4 (filing status, dependents, other income, extra withholding). It is an estimate — the exact amount is settled on your tax return.

3. FICA — Social Security and Medicare

• Social Security: 6.2% of wages, up to the annual wage base ($184,500 for 2026). Nothing is withheld above that.
• Medicare: 1.45% of all wages, with no cap.
• Additional Medicare: an extra 0.9% on wages over $200,000 in a year. Employers withhold it regardless of filing status.

4. State (and sometimes local) income tax withholding

Most states withhold income tax; nine do not tax wage income at all. Some cities — New York City, Yonkers, and Philadelphia among them — add a local tax. Rules and rates vary widely.

5. Post-tax deductions

Taken after tax: Roth 401(k) contributions, disability insurance premiums, union dues, garnishments, and charitable payroll deductions.

Reading a pay stub

A stub shows gross pay for the period, each deduction on its own line (usually with a year-to-date column), and net pay at the bottom. Check that your gross matches your hours and rate, and that your filing status and any pre-tax elections look right.

Estimate your take-home

• Take-Home Pay Calculator — from an annual salary, per year / month / paycheck.
• Paycheck Calculator — one paycheck, with the full deduction stack.

Both currently support US tax year 2026: federal, FICA, and the states California, New York, Illinois, and Pennsylvania, plus the no-income-tax states. Other states, local taxes, and other countries are not yet modelled — the tools say so rather than guessing.

Sources

• IRS Publication 15-T — Federal Income Tax Withholding Methods
• Social Security Administration — Contribution and Benefit Base
• IRS — Additional Medicare Tax

The full list of state withholding sources and the exact figures used is on the Methodology & Sources page.