Paycheck questions, answered
Short, plain answers about withholding and take-home pay for 2026.
How is take-home pay calculated?
Start with gross pay, subtract pre-tax deductions such as a traditional 401(k) or health premiums, then subtract federal income tax withholding, Social Security (6.2%), Medicare (1.45%), and any state and local tax. What is left, minus after-tax deductions, is your take-home pay.
Why is my paycheck smaller than this estimate?
Usually because of deductions your employer takes that the estimate does not know about (health insurance, HSA, 401(k), union dues, garnishments), a different W-4 setup, a local income tax, or overtime or bonus pay in that check. Enter those details and the gap normally closes.
Is withholding the same as the tax I owe?
No. Withholding is a prepayment based on your W-4. Your actual tax is worked out when you file your return, and the difference becomes a refund or a balance due.
What does the W-4 Step 2 checkbox do?
It tells your employer you have two jobs, or that you and your spouse both work. Withholding then uses tables with roughly half the usual standard deduction and narrower brackets, so more tax comes out of each check.
Why does my bonus look so heavily taxed?
Many employers withhold federal tax on bonuses at a flat 22%, plus Social Security, Medicare and state tax. That is withholding, not your final tax. If your real rate is lower, you get the difference back when you file.
Does a 401(k) contribution lower my taxes?
A traditional (pre-tax) 401(k) lowers federal and most state income tax withholding, but not Social Security or Medicare. Pennsylvania is an exception: it taxes 401(k) contributions. A Roth 401(k) comes out after tax.
Do health insurance premiums reduce taxes?
If they are paid through your employer's cafeteria (Section 125) plan, yes. They reduce federal income tax, Social Security, Medicare and usually state tax. The same goes for HSA contributions made through payroll.
What is the Social Security wage limit for 2026?
Social Security tax of 6.2% applies to the first $184,500 of wages in 2026. Above that, it stops for the rest of the year. Medicare has no cap, and an extra 0.9% applies to wages above $200,000.
Which states have no income tax on wages?
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Washington does deduct premiums for paid family leave and its WA Cares long-term care program.
How do I convert an hourly wage to a salary?
Multiply the hourly rate by hours per week and by 52. At 40 hours a week that is 2,080 hours a year, so $25 an hour is $52,000 a year.
Is this calculator tax advice?
No. It gives estimates based on published 2026 withholding formulas. Your employer's payroll system and your own tax return decide the real numbers.
Do you store what I type?
No. The calculation runs entirely in your browser. There are no cookies, no accounts and no analytics.