💰 Paycheck

Paycheck & Take-Home Pay Calculator

Estimate your net pay whether you're hourly or salaried. Enter your pay rate, hours, tips, and tax info — get a fast estimate of what may land in your bank account each paycheck.

Gross annual salary ($)

Pay periods per year

Effective tax rate (%) Combined federal + state rate. Use 22% if unsure.

Hourly rate ($/hr)

Regular hours per week

Overtime hours per week Hours above 40/week paid at 1.5× rate

Pay frequency

Effective tax rate (%)

I receive tips

Understanding Your Paycheck

Calculating your take-home pay involves understanding both your gross income and the deductions that reduce it to your net pay. The largest deductions are usually taxes, which include federal income tax, state income tax, and FICA.

How FICA Works: FICA (Federal Insurance Contributions Act) is a mandatory payroll deduction that funds Social Security and Medicare. It typically takes 7.65% of your gross earnings (6.2% for Social Security up to a wage base limit, and 1.45% for Medicare).

Effective vs. Marginal Tax Rate: Your marginal tax rate is the highest bracket your last dollar of income falls into, while your effective tax rate is the average percentage you actually pay on all your income. This calculator asks for your effective combined rate to provide a more realistic estimate of your take-home pay.

Tips and Taxes: If you receive tips, they are considered taxable income. The IRS requires you to report tips, and they are subject to both income taxes and FICA. Including them in this calculator ensures they are properly factored into your gross and net pay estimates.

W-4 Allowances: Keep in mind that this calculator provides an estimate. Your actual paycheck withholding heavily depends on how you filled out your W-4 form. Changes in deductions or allowances can shift your withholding up or down, affecting your actual net pay.

📋 Worked Example: Sarah's Bi-Weekly Paycheck

Let's walk through a real calculation. Sarah earns a $68,000 annual salary, is paid bi-weekly (26 paychecks per year), files as single with one federal allowance, and lives in Texas (no state income tax).

Item	Rate / Basis	Per Paycheck
Gross Pay	$68,000 ÷ 26 paychecks	$2,615.38
Federal Income Tax	~12.5% effective rate	− $327.54
Social Security	6.2% of gross	− $162.15
Medicare	1.45% of gross	− $37.92
Take-Home Pay		$2,087.77

💡 Key insight: Sarah keeps roughly 79.8 cents of every dollar earned. If she lived in California instead, an additional ~5.5% state income tax would reduce her paycheck to about $1,944 — $144 less per check, or $3,744 less per year.

Frequently Asked Questions

What is FICA and why is it taken out?

FICA stands for Federal Insurance Contributions Act. It's a U.S. federal payroll tax that funds Social Security and Medicare. Employers and employees split the cost.

What's the difference between gross and net pay?

Gross pay is the total amount you earn before any deductions. Net pay (take-home pay) is what remains after taxes, FICA, and other deductions are taken out.

Are tips taxable income?

Yes, tips are considered taxable income by the IRS and are subject to federal income, Social Security, and Medicare taxes.

How does overtime affect my taxes?

Overtime increases your gross income, which can push your total earnings into a higher tax bracket and increase the total amount of taxes withheld.

Why does my actual paycheck differ from the calculator?

This calculator provides an estimate. Actual withholding depends on your W-4 elections, pre-tax deductions like 401(k) or health insurance, and specific local taxes.

LedgerlyTools calculators use standard financial formulas — the same math financial professionals use. We're developers, not financial advisors. Results are estimates. See our methodology →