To calculate take-home pay, start with your gross pay for one pay period, subtract pre-tax deductions, then subtract federal income tax, Social Security, Medicare, and any state or local income tax. Finally, subtract after-tax deductions. What remains is your net pay.
The steps below show how to calculate take home pay by hand, so you can see where every dollar goes. For a quick answer, the paycheck calculator does the same math in seconds.
How to calculate take-home pay: start with gross pay
Step 1: Find your gross pay per paycheck
Divide your annual salary by the number of paydays in a year:
| Pay frequency | Paydays per year |
|---|---|
| Weekly | 52 |
| Biweekly | 26 |
| Semimonthly | 24 |
| Monthly | 12 |
If you are paid hourly, multiply your hourly rate by the hours in the pay period, and add overtime at the correct rate. Some calendar years have 27 biweekly or 53 weekly paydays, which changes the per-check amount for some salaried workers.
Step 2: Subtract pre-tax deductions
Pre-tax deductions come out before income tax is calculated. The most common are:
- Traditional 401(k), 403(b) or 457 contributions (2026 limit: $24,500, plus catch-up contributions if you are 50 or older)
- Health, dental and vision premiums paid through your employer's plan
- HSA contributions made through payroll
Keep two running totals here. Traditional retirement contributions reduce the wages used for federal income tax but not for Social Security and Medicare. Health premiums and payroll HSA contributions usually reduce both. Most states follow the federal treatment, but not all: Pennsylvania, for example, taxes 401(k) contributions.
Subtract the taxes
Step 3: Estimate federal income tax withholding
Employers use the IRS percentage method in Publication 15-T. A simplified version works like this:
- Multiply your taxable pay per period by the number of pay periods to get an annual figure.
- Subtract the standard deduction for your filing status: $16,100 single, $32,200 married filing jointly, $24,150 head of household.
- Apply the 2026 tax brackets to what is left.
- Divide the annual tax by the number of pay periods.
Your W-4 changes this result. Dependents claimed in Step 3 of the form lower withholding. Extra income in Step 4(a), deductions in Step 4(b), extra withholding in Step 4(c) and the two-jobs checkbox all shift it too. Our guide to 2026 federal tax brackets lists every bracket for each filing status.
Step 4: Subtract Social Security and Medicare
These are flat percentages of your FICA wages (gross pay minus health premiums and similar cafeteria-plan deductions):
- Social Security: 6.2% on wages up to $184,500 for the year
- Medicare: 1.45% on all wages, plus 0.9% Additional Medicare Tax withheld once your wages pass $200,000 in a year
Step 5: Subtract state and local income tax
State rules vary widely. Some states have no wage tax, some have one flat rate, and others use brackets like the federal system. Each state sets its own standard deduction or personal exemption. Some cities, counties and school districts add a local income tax on top. Find your state in the state paycheck calculator directory.
Finish with after-tax deductions
Step 6: Subtract after-tax deductions
Roth 401(k) contributions, some insurance, union dues and garnishments come out last. They do not lower your taxes. What remains is your take-home pay. See pre-tax vs after-tax deductions for how to tell which is which on your stub.
Worked example: $72,000 a year in Georgia
Here is the full calculation for a single filer earning $72,000 in Georgia, paid semimonthly (24 paychecks), with no pre-tax deductions and a standard W-4.
The federal tax step, by hand
- Annual wages: $72,000
- Minus standard deduction: $72,000 − $16,100 = $55,900 taxable
- 10% on the first $12,400 = $1,240
- 12% on the next $38,000 (up to $50,400) = $4,560
- 22% on the remaining $5,500 = $1,210
- Annual federal tax: $7,010, or $292.08 per paycheck
Georgia tax
Georgia has a flat 5.19% rate for 2026 and a $12,000 standard deduction for single filers. That gives ($72,000 − $12,000) × 5.19% = $3,114 a year, or $129.75 per paycheck.
The full paycheck
| Line | No deductions | With benefits |
|---|---|---|
| Gross pay | $3,000.00 | $3,000.00 |
| 401(k) (5%) | $0.00 | −$150.00 |
| Health insurance (pre-tax) | $0.00 | −$110.00 |
| Federal income tax | −$292.08 | −$237.97 |
| Social Security | −$186.00 | −$179.18 |
| Medicare | −$43.50 | −$41.91 |
| Georgia income tax | −$129.75 | −$116.26 |
| Life insurance (after-tax) | $0.00 | −$15.00 |
| Take-home pay | $2,348.67 | $2,149.68 |
These figures are estimates from the Georgia paycheck calculator. Without deductions, this worker takes home about $56,368 a year. With the benefits shown, take-home pay is about $51,592, but $6,240 of the difference went into retirement savings and health coverage.
The $275 in benefit deductions cut take-home pay by about $199 per check. The rest was made up by lower federal, state and FICA taxes.
Common mistakes when you calculate by hand
- Applying your top bracket to all income. Only the dollars inside each bracket are taxed at that rate. In the example, the 22% rate applied to just $5,500.
- Forgetting FICA. Social Security and Medicare took $229.50 from each $3,000 check, more than three-quarters of what federal income tax took.
- Reducing FICA wages by 401(k) contributions. Traditional 401(k) money is still subject to Social Security and Medicare.
- Skipping local taxes. Workers in cities with their own income tax need to add it.
- Ignoring the W-4. Credits for dependents or the two-jobs box can change withholding by a lot. Read how the W-4 affects your paycheck.
Frequently Asked Questions
Is withholding the same as the tax I owe?
No. Withholding is an estimate taken from each paycheck. Your actual tax is figured on your return, and the difference becomes a refund or a balance due.
Why doesn't my hand calculation match my pay stub exactly?
Employers follow the exact IRS Publication 15-T tables and your W-4 entries, and they round at different steps. Small differences of a few dollars are normal.
Do the new tips and overtime deductions change my take-home pay?
The deductions for qualified tips and overtime added by 2025 federal law are claimed on your tax return. They generally do not change standard paycheck withholding.
How do I calculate take-home pay if I'm paid hourly?
Use the same steps, starting with hours worked times your rate for the pay period. If your hours vary, use an average week for an estimate.
Sources
- IRS Publication 15-T, Federal Income Tax Withholding Methods
- IRS Revenue Procedure 2025-32 (2026 inflation adjustments)
- IRS Topic 751: Social Security and Medicare Withholding Rates
- Tax Foundation: State Individual Income Tax Rates and Brackets, 2026
Run the numbers for your state
Written and checked against IRS, Social Security Administration and state tax agency publications for the 2026 tax year. General information, not tax, legal or financial advice. Read our editorial policy, calculation methodology and sources.