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How take-home pay is calculated
Your salary and your paycheck are two very different numbers. Here is exactly how the money gets reduced, step by step, using the same logic our paycheck calculator applies for 2026.
Step 1 — Start with gross pay
Gross pay is your full salary before anything comes out. If you earn $65,000 a year, that is your gross. Everything below reduces it to your net (take-home) pay.
Step 2 — Subtract pre-tax deductions
Contributions to a traditional 401(k), HSA or similar plans come out before income tax is calculated, which lowers your taxable income. Important: these still leave your paycheck — the money goes into your account rather than your bank.
Step 3 — Apply the standard deduction
For 2026 the standard deduction is $16,100 (single), $32,200 (married filing jointly) and $24,150 (head of household). This amount is subtracted before federal income tax is calculated, so only income above it is taxed.
Step 4 — Federal income tax (2026 brackets)
The U.S. uses a progressive system. Only the income that falls inside each bracket is taxed at that bracket's rate — moving into a higher bracket does not raise the rate on your whole income.
| Rate | Single (taxable income) | Married filing jointly |
|---|---|---|
| 10% | $0 – $12,400 | $0 – $24,800 |
| 12% | $12,401 – $50,400 | $24,801 – $100,800 |
| 22% | $50,401 – $105,700 | $100,801 – $211,400 |
| 24% | $105,701 – $201,775 | $211,401 – $403,550 |
| 32% | $201,776 – $256,225 | $403,551 – $512,450 |
| 35% | $256,226 – $640,600 | $512,451 – $768,700 |
| 37% | $640,601+ | $768,701+ |
Source: IRS Revenue Procedure 2025-32 (2026 tax year), via the Tax Foundation.
Step 5 — FICA: Social Security and Medicare
FICA is separate from income tax and applies to almost all wages. For 2026: Social Security is 6.2% on wages up to $184,500, and Medicare is 1.45% on all wages (plus an extra 0.9% above $200,000 single / $250,000 married). Read the full deductions guide.
Step 6 — State income tax
This is where location matters most. Nine states take nothing from your wages; others range from roughly 2.5% to over 8%. Your state also has its own deductions and brackets.
Step 7 — What's left is your take-home pay
Subtract federal tax, FICA and state tax (and any pre-tax and post-tax deductions) from your gross, and you have your net pay. Divide by the number of pay periods to see each paycheck.
General information for tax year 2026, not tax advice. Consult a tax professional for your specific situation.