In the United States, "Salary After Tax" refers to your net income—the actual amount of money that enters your checking account on payday. While your gross salary is the figure most often cited in job offers and performance reviews, it is essentially a theoretical starting point. The journey from gross to net in the US is one of the most complex in the world, involving multiple layers of government, mandatory social insurance, and often voluntary benefit elections.
Understanding your take-home pay is vital for every American worker, from hourly contractors to C-suite executives. In the US system, your net pay is influenced not just by how much you earn, but by *where* you live, *who* is in your household (filing status), and *how* you choose to save for the future. For example, a $100,000 salary in California yields a significantly lower take-home pay than the same salary in Florida or Texas due to the absence of state-level income tax in the latter two.
A standard American paycheck breakdown typically includes four major segments:
Federal Income Tax: A progressive tax collected by the IRS to fund national defense, infrastructure, and federal programs.
FICA (Federal Insurance Contributions Act): Mandatory payroll taxes consisting of Social Security (6.2%) and Medicare (1.45%) contributions.
State and Local Income Tax: Taxes levied by 41 states and several thousand municipalities (like NYC or Philadelphia) to fund local services.
Post-Tax and Pre-Tax Deductions: Voluntary contributions to retirement (401k), health insurance, and flexible spending accounts.
How Your US Paycheck Is Calculated
Calculating a US paycheck follows a strict mathematical waterfall governed by the Internal Revenue Code (IRC). To get an accurate estimate, our engine mirrors the logic used by professional payroll providers. While we utilize publicly available 2025 government tax data and standardized calculation practices, your exact paycheck may differ due to local taxes, employer benefits, or individual tax credits.
The first step is applying Pre-Tax Deductions. If you contribute 5% to a traditional 401(k), the IRS "ignores" that $250 for income tax purposes, though it may still be subject to FICA taxes. This is why pre-tax savings are so powerful—they lower your taxable income at your highest marginal rate.
Once the taxable base is established, we apply the Federal Income Tax Brackets. The US uses a "marginal" system, meaning you only pay the highest rate on the dollars within that specific bracket. For a single filer, the first ~$11,000 is taxed at 10%, with rates increasing up to 37% for earners over $600,000. Simultaneously, FICA Taxes are calculated at a flat 7.65% (combined Social Security and Medicare).
Finally, State and Local Taxes are computed. States like Oregon or California use progressive brackets similar to the federal system, while states like Indiana or Pennsylvania use a flat rate. The total of all these deductions is subtracted from your gross pay to arrive at your Net Pay—your paycheck.
Why Filing Status and Location Matter
One of the most common mistakes users make is assuming their tax rate is fixed. In the US, your tax liability is a dynamic figure. Your Filing Status—Single, Married Filing Jointly, or Head of Household—changes the size of your standard deduction and the thresholds for your tax brackets. A married couple filing jointly can earn nearly double what a single person earns before hitting the 22% bracket.
Location is equally critical. The United States is a patchwork of tax laws. California has the highest top rate in the country at 13.3%, while states like Washington and Tennessee have no state income tax at all (though Washington has a new capital gains tax for high earners). Furthermore, cities like New York City or Yonkers add their own municipal income tax, which can surprise employees who live in the suburbs but work in the city.
When comparing job offers, it is vital to look at the "Local Purchasing Power." A $120,000 offer in Austin, Texas, may actually provide more take-home pay and a better lifestyle than a $150,000 offer in San Francisco once state taxes and the cost of living are factored in.
Common US Salary Calculation Mistakes
Avoid these common financial traps when projecting your US income:
Misunderstanding Marginal Brackets
Moving into a higher bracket does NOT lower your total take-home pay. Only the income *above* the threshold is taxed at the new, higher rate.
Overlooking the FICA Wage Base
The Social Security portion of FICA stops after you earn $176,100 (in 2025). High earners often notice a sudden "raise" in their paychecks late in the year once this cap is hit.
Ignoring W-4 Accuracy
If your W-4 is outdated (e.g., it doesn't reflect your new marriage or child), your employer will withhold too much or too little tax, leading to a surprise bill or a massive, zero-interest loan to the government in the form of a refund.
US Tax: Frequently Asked Questions
What is FICA tax on my paycheck?
FICA stands for Federal Insurance Contributions Act. It consists of Social Security (6.2%) and Medicare (1.45%). Both are mandatory payroll taxes.
Why is my federal withholding so high?
Federal withholding is determined by your W-4 form. If you've indicated "Single" with no adjustments, your employer withholds a standard amount to ensure you don't owe money at tax time.
What is the 2025 Standard Deduction?
For 2025, the standard deduction is $15,000 for single filers and $30,000 for married couples filing jointly. This amount of your income is entirely tax-free.
Do all states have income tax?
No. Currently, 7 states have no income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming. Washington and New Hampshire have taxes on specific types of income only.
How does the IRS view 401(k) contributions?
Traditional 401(k) contributions are "pre-tax," meaning they are subtracted from your gross pay before federal and state income taxes are calculated.
What is the difference between a tax bracket and an effective tax rate?
A tax bracket is the peak rate you pay on your last dollar. Your effective tax rate is the total tax you paid divided by your total income.
Are bonuses taxed differently?
Bonuses are often withheld at a flat "supplemental" rate (usually 22% federal), but they are ultimately taxed as same as regular income when you file your return.
Can I trust this calculator for my W-2?
This tool provides an estimate. Your actual W-2 will reflect your employer's specific payroll implementation, including local taxes and insurance costs.
Who Should Use This Tool
This tool is optimized for US Employees receiving a standard W-2 paycheck. It is particularly useful for Relocators comparing a move between states (e.g., NYC to Florida) to understand their change in net income. Job Hunters use it to verify which salary offer actually provides more disposable income after the local "tax haircut."
Note for Freelancers: If you are a 1099 contractor or self-employed, this calculator will underestimate your taxes, as you are responsible for both the employer and employee portions of FICA (Self-Employment Tax).