How We Calculate Your Take-Home Pay
By Use Paycheck Calculator Research Desk · Updated for 2026 Tax Year
Paycheck math is a deterministic pipeline. We start with your gross salary, apply pre-tax deductions (401(k), HSA), compute federal taxable income against the 2026 IRS bracket schedule, layer FICA (Social Security and Medicare), and finally run state income tax through your specific state's revenue department formulas. Every primary source we use is publicly available from government tax authorities.
Federal Income Tax & FICA
Federal income tax in 2026 uses a seven-bracket progressive schedule ranging from 10% to 37%. Our engine pulls bracket thresholds and standard-deduction figures directly from IRS inflation-adjustment guidance for tax year 2026. For FICA, Social Security is calculated at 6.2% up to the 2026 wage base of $184,500. Medicare is applied at 1.45% on all wages, with the 0.9% Additional Medicare Tax applied to wages above the IRS thresholds.
State Income Tax Structure
State taxes fall into three classes:
- Nine states have no broad-based personal income tax.
- Sixteen states apply a single flat rate to every wage dollar.
- Twenty-six jurisdictions use progressive bracket schedules.
Our tax-engine configuration stores each state's schedule, sourced directly from state departments of revenue.
Known Limitations & Exclusions
Our calculator provides a highly accurate estimate for steady-state W-2 employees. However, it does not currently model:
- Multi-state reciprocity scenarios.
- Local city or county municipal taxes (e.g., NYC local tax).
- Complex W-4 Step 4 deductions beyond standard pre-tax inputs.
- Supplemental wage handling for erratic bonuses or stock vests.