Gross Pay vs. Take-Home Pay
Your gross pay is what your employer agrees to pay you. Your take-home (net) pay is what lands in your bank account after deductions and taxes. For most U.S. employees the gap comes from five items: pre-tax deductions such as a traditional 401(k), federal income tax withholding, Social Security tax, Medicare tax, and state or local income tax.
Step 1: Gross Pay per Paycheck
Divide annual pay by your number of pay periods: 52 for weekly, 26 for every two weeks, 24 for twice a month and 12 for monthly. Biweekly and semi-monthly look similar but are not the same: 26 biweekly checks are smaller than 24 semi-monthly ones, and in most years two months contain a third biweekly payday.
Step 2: Pre-Tax Deductions
Traditional 401(k) and 403(b) contributions come out before federal income tax, which lowers your taxable wages. The IRS set the 2026 employee contribution limit at $24,500. These contributions still count as wages for Social Security and Medicare, so they reduce income tax but not FICA.
Step 3: Federal Income Tax
For tax year 2026, IRS Revenue Procedure 2025-32 sets the standard deduction at $16,100 for single filers and $32,200 for married couples filing jointly. Taxable income is taxed in slices:
| Single taxable income | Rate |
|---|---|
| Up to $12,400 | 10% |
| $12,400 to $50,400 | 12% |
| $50,400 to $105,700 | 22% |
| $105,700 to $201,775 | 24% |
| $201,775 to $256,225 | 32% |
| $256,225 to $640,600 | 35% |
| Over $640,600 | 37% |
Joint-filer thresholds are double the single ones up to the 32% bracket. Your employer actually withholds using your Form W-4 and the tables in IRS Publication 15-T, so an annual estimate divided by pay periods is close but not identical to a real pay stub.
Step 4: Social Security and Medicare (FICA)
The Social Security Administration lists the 2026 employee rate as 7.65%: 6.2% for Social Security and 1.45% for Medicare. Social Security applies only to the first $184,500 of 2026 wages, up from $176,100 in 2025. Medicare has no cap, and an Additional Medicare Tax of 0.9% applies to wages over $200,000. The IRS requires employers to start withholding that extra 0.9% once your wages pass $200,000 in the year, whatever your filing status.
Step 5: State and Local Tax
State income tax ranges from nothing in states with no wage income tax to graduated brackets in others, and some cities add their own. For a quick estimate, apply your state's approximate effective rate to your pay after pre-tax deductions, then check your state revenue department for the exact rules.
Worked Example: $65,000 Salary, Paid Biweekly
Single filer, $65,000 a year, 26 paychecks, $100 per paycheck into a traditional 401(k), no state tax.
- Gross per paycheck: $65,000 ÷ 26 = $2,500.00
- 401(k): $100.00 ($2,600 a year)
- Taxable income: $65,000 − $2,600 − $16,100 = $46,300. Tax = $1,240 + 12% × $33,900 = $5,308 a year, or $204.15 per paycheck
- Social Security: 6.2% × $2,500 = $155.00
- Medicare: 1.45% × $2,500 = $36.25
Take-home: $2,500.00 − $100.00 − $204.15 − $155.00 − $36.25 = $2,004.60 per paycheck, or about $52,120 a year.
Tips for Checking Your Pay Stub
- Compare year-to-date totals, not single checks, since bonuses and benefit changes shift withholding.
- High earners: Social Security stops once you pass $184,500 in 2026 wages, so late-year paychecks get bigger.
- Update your W-4 after a raise, a second job or a change in filing status.
Frequently Asked Questions
How do I calculate my take-home pay?
Start with gross pay per paycheck, subtract pre-tax deductions, federal income tax, Social Security (6.2%), Medicare (1.45%) and any state or local tax.
What is the 2026 Social Security wage base?
$184,500. Social Security tax stops once your 2026 wages pass that amount. Medicare has no wage cap.
Does a 401(k) lower my FICA taxes?
No. Traditional 401(k) contributions reduce federal income tax but are still subject to Social Security and Medicare tax.
Why is my paycheck different from the estimate?
Employers withhold based on your W-4 and IRS Publication 15-T, and your pay may include benefits, credits or state rules that a simple estimate does not model.
Sources
- IRS, "IRS releases tax inflation adjustments for tax year 2026" (IR-2025-103) and Revenue Procedure 2025-32 (irs.gov), standard deduction and brackets.
- IRS, "401(k) limit increases to $24,500 for 2026" (IR-2025-111, irs.gov).
- Social Security Administration, "2026 Cost-of-Living Adjustment Fact Sheet" (ssa.gov/news/en/cola/factsheets/2026.html), 7.65% rate and $184,500 taxable maximum.
- IRS, "Questions and Answers for the Additional Medicare Tax" (irs.gov), $200,000 withholding threshold.
- IRS Publication 15-T, Federal Income Tax Withholding Methods (irs.gov).
This guide is for education. For tax, payroll or legal decisions, check the rules that apply to you.