How to Calculate Your Take-Home Pay in 2026

January 6, 2026 · 7 min read

Your salary and your paycheck are two very different numbers. The figure on your offer letter is gross pay — the total before anything is withheld. What actually reaches your bank account is net pay, or take-home pay, after federal tax, Social Security, Medicare, state tax, and any benefit deductions are subtracted. This guide walks through exactly how to get from one to the other in 2026, step by step, with a full worked example.

The five steps from gross to net

Every payroll system, and our paycheck calculator, follows the same sequence:

1. Start with gross pay for the period (or your annual salary).
2. Subtract pre-tax deductions such as traditional 401(k), HSA, and health-insurance premiums to find your taxable wages.
3. Calculate federal income tax using the IRS brackets and standard deduction.
4. Calculate FICA taxes — Social Security and Medicare — on your wages.
5. Calculate state (and any local) income tax, then subtract everything to land on net pay.

Step 1 & 2: Gross pay and pre-tax deductions

If you're salaried, your gross pay per check is simply your annual salary divided by the number of pay periods in a year: 12 for monthly, 24 for semi-monthly, 26 for biweekly, or 52 for weekly. If you're hourly, multiply your rate by hours worked and add overtime (typically 1.5× for hours beyond 40 per week).

Next, subtract pre-tax deductions. A traditional 401(k) contribution, HSA contribution, or your share of health-insurance premiums comes out beforeincome tax is figured, so it shrinks the wages the IRS taxes. This is why contributing to retirement can feel "cheaper" than the sticker amount — part of the contribution is money that would otherwise have gone to tax.

Step 3: Federal income tax

Federal income tax is progressive: your income is sliced into bands and each band is taxed at its own rate. First, subtract the standard deduction for your filing status — $16,100 for single filers in 2026, $32,200 for married filing jointly, and $24,150for head of household. What's left is your taxable income, which you run through the 2026 brackets. Only the dollars inside a given bracket are taxed at that bracket's rate, so your marginal rate (the rate on your last dollar) is always higher than your effective rate (tax divided by total income).

Step 4: FICA — Social Security and Medicare

FICA taxes are flat and come out of nearly every paycheck:

• Social Security: 6.2% of wages, up to the 2026 wage base of $184,500. Earnings above that aren't subject to Social Security tax.
• Medicare: 1.45% of all wages with no cap, plus an additional 0.9% on wages above $200,000 (single) or $250,000 (married filing jointly).

Your employer quietly matches the 6.2% and 1.45% on their side. If you're self-employed, you pay both halves — 15.3% — as self-employment tax.

Step 5: State and local tax

State income tax is where outcomes diverge the most. Nine states — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — levy no tax on wages. Others charge a single flat rate, and many use their own graduated brackets. A handful of cities and counties add local income tax on top. Subtract state and local tax, and whatever remains is your take-home pay.

A full worked example

Let's take a single filer earning $70,000 a year, paid biweekly (26 checks), in a state with no income tax, taking the standard deduction and making no pre-tax contributions.

• Taxable income: $70,000 − $16,100 standard deduction = $53,900
• Federal income tax: 10% × $12,400 + 12% × $38,000 + 22% × $3,500 = $1,240 + $4,560 + $770 = $6,570
• Social Security: 6.2% × $70,000 = $4,340
• Medicare: 1.45% × $70,000 = $1,015
• Total withheld: $6,570 + $4,340 + $1,015 = $11,925
• Annual take-home: $70,000 − $11,925 = $58,075
• Per biweekly paycheck: $58,075 ÷ 26 ≈ $2,234

Notice the effective federal income tax rate is just $6,570 ÷ $70,000 ≈ 9.4%, even though this worker sits in the 22% marginal bracket. Add a state income tax and the take-home figure drops further; add a 401(k) contribution and the federal tax line shrinks because taxable income falls.

Let the calculator do the arithmetic

Doing this by hand is great for understanding the mechanics, but it's tedious to repeat for every scenario. The TakeHomePay.live calculator runs all five steps instantly for any wage, filing status, pay frequency, and state — and because the math happens in your browser, none of your numbers are ever sent anywhere. Want to go deeper on any single step? See our guides on the 2026 federal tax brackets and paycheck deductions.