Free Paycheck Calculator: Hourly & Salary Take Home After Taxes (2023)

Federal Paycheck Calculator

Free Paycheck Calculator: Hourly & Salary Take Home After Taxes (1)

Federal Paycheck Quick Facts

  • Federal income tax rates range from 10% up to a top marginal rate of 37%.
  • The U.S. real median household income (adjusted for inflation) in 2021 was $70,784.
  • 9 U.S. states don't impose their own income tax for tax year 2022.

How Your Paycheck Works: Income Tax Withholding

When you start a new job or get a raise, you’ll agree to either an hourly wage or an annual salary. But calculating your weekly take-home pay isn’t a simple matter of multiplying your hourly wage by the number of hours you’ll work each week, or dividing your annual salary by 52. That’s because your employer withholds taxes from each paycheck, lowering your overall pay. Because of the numerous taxes withheld and the differing rates, it can be tough to figure out how much you’ll take home. That’s where our paycheck calculator comes in.

Tax withholding is the money that comes out of your paycheck in order to pay taxes, with the biggest one being income taxes. The federal government collects your income tax payments gradually throughout the year by taking directly from each of your paychecks. It's your employer's responsibility to withhold this money based on the information you provide in your Form W-4. You have to fill out this form and submit it to your employer whenever you start a new job, but you may also need to re-submit it after a major life change, like a marriage.

If you do make any changes, your employer has to update your paychecks to reflect those changes. Most people working for a U.S. employer have federal income taxes withheld from their paychecks, but some people are exempt. To be exempt, you must meet both of the following criteria:

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  1. In the previous tax year, you received a refund of all federal income tax withheld from your paycheck because you had zero tax liability.
  2. This year, you expect to receive a refund of all federal income tax withheld because you expect to have zero tax liability again. If you think you qualify for this exemption, you can indicate this on your W-4 Form.

Federal Top Income Tax Rate


When it comes to tax withholdings, employees face a trade-off between bigger paychecks and a smaller tax bill. It's important to note that while past versions of the W-4 allowed you to claim allowances, the current version doesn't. Additionally, it removes the option to claim personal and/or dependency exemptions. Instead, filers are required to enter annual dollar amounts for things such as total annual taxable wages, non-wage income and itemized and other deductions. The new version also includes a five-step process for indicating additional income, entering dollar amounts, claiming dependents and entering personal information.

One way to manage your tax bill is by adjusting your withholdings. The downside to maximizing each paycheck is that you might end up with a bigger tax bill if, come April, you haven't had enough withheld to cover your tax liability for the year. That would mean that instead of getting a tax refund, you would owe money.

If the idea of a big one-off bill from the IRS scares you, then you can err on the side of caution and adjust your withholding. Each of your paychecks may be smaller, but you’re more likely to get a tax refund and less likely to have tax liability when you fill out your tax return.

Of course, if you opt for more withholding and a bigger refund, you're effectively giving the government a loan of the extra money that’s withheld from each paycheck. If you opt for less withholding you could use the extra money from your paychecks throughout the year and actually make money on it, such as through investing or putting it in a high-interest savings account. You could also use that extra money to make extra payments on loans or other debt.

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When you fill out your W-4, there are worksheets that will walk you through withholdings based on your marital status, the number of children you have, the number of jobs you have, your filing status, whether someone else claims you as your dependent, whether you plan to itemize your tax deductions and whether you plan to claim certain tax credits. You can also fine-tune your tax withholding by requesting a certain dollar amount of additional withholding from each paycheck on your W-4.

A financial advisor can help you understand how taxes fit into your overall financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

How Your Paycheck Works: FICA Withholding

In addition to income tax withholding, the other main federal component of your paycheck withholding is for FICA taxes. FICA stands for the Federal Insurance Contributions Act. Your FICA taxes are your contribution to the Social Security and Medicare programs that you’ll have access to when you’re a senior. It’s your way of paying into the system.

FICA contributions are shared between the employee and the employer. 6.2% of each of your paychecks is withheld for Social Security taxes and your employer contributes a further 6.2%. However, the 6.2% that you pay only applies to income up to the Social Security tax cap, which for 2022 is $147,000 ($160,200 for 2023). So any income you earn above that cap doesn’t have Social Security taxes withheld from it. It will still have Medicare taxes withheld, though.

There is no income limit on Medicare taxes. 1.45% of each of your paychecks is withheld for Medicare taxes and your employer contributes another 1.45%. If you make more than a certain amount, you'll be on the hook for an extra 0.9% in Medicare taxes. Here's a breakdown of these amounts for tax year 2022, which is filed in 2023:

  • $200,000 for single filers, heads of household and qualifying widow(er)s with dependent children
  • $250,000 for married taxpayers filing jointly
  • $125,000 for married taxpayers filing separately

2022 - 2023 Income Tax Brackets

  • Single Filers
  • Married, Filing Jointly
  • Married, Filing Separately
  • Head of Household
Single Filers
Taxable IncomeRate
$0 - $10,27510%
$10,276 - $41,77512%
$41,776 - $89,07522%
$89,076 - $170,05024%
$170,051 - $215,95032%
$215,951 - $539,90035%
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Married, Filing Jointly
Taxable IncomeRate
$0 - $20,55010%
$20,551 - $83,55012%
$83,551 - $178,15022%
$178,151 - $340,10024%
$340,101 - $431,90032%
$431,901 - $647,85035%
Married, Filing Separately
Taxable IncomeRate
$0 - $10,27510%
$10,276 - $41,77512%
$41,776 - $89,07522%
$89,076 - $170,05024%
$170,051 - $215,95032%
$215,951 - $323,92535%
Head of Household
Taxable IncomeRate
$0 - $14,65010%
$14,651 - $55,90012%
$55,901 - $89,05022%
$89,051 - $170,05024%
$170,051 - $215,95032%
$215,951 - $539,90035%
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If you work for yourself, you need to pay the self-employment tax, which is equal to both the employee and employer portions of the FICA taxes (15.3% total). Luckily, when you file your taxes, there is a deduction that allows you to deduct the half of the FICA taxes that your employer would typically pay. The result is that the FICA taxes you pay are still only 6.2% for Social Security and 1.45% for Medicare.

How Your Paycheck Works: Deductions

Federal income tax and FICA tax withholding are mandatory, so there’s no way around them unless your earnings are very low. However, they’re not the only factors that count when calculating your paycheck. There are also deductions to consider.

For example, if you pay any amount toward your employer-sponsored health insurance coverage, that amount is deducted from your paycheck. When you enroll in your company’s health plan, you can see the amount that is deducted from each paycheck. If you elect to contribute to a Health Savings Account (HSA) or Flexible Spending Account (FSA) to help with medical expenses, those contributions are deducted from your paychecks too.

Also deducted from your paychecks are any pre-tax retirement contributions you make. These are contributions that you make before any taxes are withheld from your paycheck. The most common pre-tax contributions are for retirement accounts such as a 401(k) or 403(b). So if you elect to save 10% of your income in your company’s 401(k) plan, 10% of your pay will come out of each paycheck. If you increase your contributions, your paychecks will get smaller. However, making pre-tax contributions will also decrease the amount of your pay that is subject to income tax. The money also grows tax-free so that you only pay income tax when you withdraw it, at which point it has (hopefully) grown substantially.

Some deductions from your paycheck are made post-tax. These include Roth 401(k) contributions. The money for these accounts comes out of your wages after income tax has already been applied. The reason to use one of these accounts instead of an account taking pre-tax money is that the money in a Roth IRA or Roth 401(k) grows tax-free and you don’t have to pay income taxes when you withdraw it (since you already paid taxes on the money when it went in). If you are early in your career or expect your income level to be higher in the future, this kind of account could save you on taxes in the long run.

How Your Paycheck Works: Pay Frequency

Some people get monthly paychecks (12 per year), while some are paid twice a month on set dates (24 paychecks per year) and others are paid bi-weekly (26 paychecks per year). The frequency of your paychecks will affect their size. The more paychecks you get each year, the smaller each paycheck is, assuming the same salary.

How Your Paycheck Works: Local Factors

If you live in a state or city with income taxes, those taxes will also affect your take-home pay. Just like with your federal income taxes, your employer will withhold part of each of your paychecks to cover state and local taxes.

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How can I calculate what my take home pay will be? ›

Figure out the take-home pay by subtracting all the calculated deductions from the gross pay, or using this formula: Net pay = Gross pay - Deductions (FICA tax; federal, state and local taxes; and health insurance premiums).

How is your take home pay or net pay calculated? ›

Gross pay is what employees earn before taxes, benefits and other payroll deductions are withheld from their wages. The amount remaining after all withholdings are accounted for is net pay or take-home pay.

What percent of taxes are taken out of paycheck? ›

There are seven tax brackets in 2022 and 2023: 12%. 22%, 24%, 32%, 35%, and 37%. FICA and federal withholding are taken out of adjusted gross pay, meaning any deductions from contributing to a 401(k) or other tax-deferred accounts are factored in beforehand.

How much tax is taken out of $500? ›

If the gross pay is $500, Social Security and Medicare combined come to $38.25. The employee's federal income tax is $47.50. After these amounts are subtracted, the take-home pay comes to $414.25. If you are in a state that levies a state income tax, follow state rules to calculate and deduct the state income tax.

How much of your pay should you take home? ›

50% of your net income should go towards living expenses and essentials (Needs), 20% of your net income should go towards debt reduction and savings (Debt Reduction and Savings), and 30% of your net income should go towards discretionary spending (Wants).

How much tax is deducted from a paycheck in Canada? ›

The tax rates in Ontario range from 5.05% to 13.16% of income and the combined federal and provincial tax rate is between 20.05% and 53.53%.

How do you calculate gross pay? ›

Multiply the employee's total work hours by their hourly wage. For example, if the employee worked 40 hours during the week at a wage of $22 per hour, their gross wages are 40 hours x $22 = $880.

How do you calculate average payroll? ›

To determine an average amount:
  1. Add the gross income for the time period used;
  2. Divide the total gross income (Step 1) by the number of pay dates used;
  3. Multiply the average pay (Step 2) by the conversion factor, if applicable.

What is the take home pay on $300 K? ›

If you make $300,000 a year living in the region of California, USA, you will be taxed $117,087. That means that your net pay will be $182,913 per year, or $15,243 per month. Your average tax rate is 39.0% and your marginal tax rate is 48.7%.

How to calculate the percentage? ›

Percentage Formula

To determine the percentage, we have to divide the value by the total value and then multiply the resultant by 100.

What is the formula for net income? ›

Net Income = Total Revenues – Total Expenses

Total expenses include the cost of goods and services sold, operating expenses like salaries and wages, office maintenance, utilities and depreciation, and amortization, interest income.


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