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Understanding Your Paycheck Deductions

Every paycheck is reduced by several mandatory deductions before it reaches your bank account. Federal income tax is withheld based on your W-4 elections and the IRS tax brackets for your filing status. State income tax varies widely: some states have no income tax, while others take 5% or more. Your employer calculates both using the information you provide.

On top of income taxes, you pay two FICA payroll taxes every pay period. Social Security tax is 6.2% of your gross wages up to the annual wage base of $168,600. Medicare tax is 1.45% on all wages, with an additional 0.9% once earnings exceed $200,000 ($250,000 for married filers). Together, FICA deductions typically represent 7.65% of your pay. Pre-tax contributions to a 401(k) or health insurance premiums reduce your taxable income and can increase your take-home amount.

Example: A single filer earning $75,000 per year, paid biweekly (26 pay periods), will see roughly $2,885 in gross pay per paycheck. After federal tax, state tax (varies), Social Security ($179), and Medicare ($42), the approximate net pay is around $2,165 per paycheck, depending on your state.

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Paycheck Calculator

Estimate your take-home pay after federal tax, state tax, and FICA deductions.

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Each allowance reduces taxable income by approximately $4,300.

This calculator provides estimates using simplified flat state tax rates. Actual state taxes vary by income level. It does not account for local taxes, pre-tax deductions (401k, health insurance), or additional Medicare tax. Consult a qualified tax professional for advice specific to your situation.

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