How Our Paycheck Tax Calculator Works

This page explains the exact calculation methodology used by PaycheckTaxCalc. All calculations are performed client-side in your browser — no data is sent to a server.

Last updated: January 2024

Step 1 — Annualize gross pay

We first convert your entry to an annual figure. If you entered a per-paycheck amount, we multiply by your pay period count: weekly × 52, bi-weekly × 26, semi-monthly × 24, monthly × 12, annually × 1.

Step 2 — Subtract pre-tax deductions

Pre-tax deductions (traditional 401(k), health insurance, HSA, FSA, and other pre-tax items) are subtracted from annual gross pay to arrive at federal taxable wages. These deductions reduce your taxable income before federal and most state income taxes are calculated.

Note: Social Security and Medicare (FICA) taxes are typically calculated on gross wages before pre-tax deductions, with the exception of certain Section 125 (cafeteria plan) contributions such as health insurance and FSA deposits, which are FICA-exempt. For simplicity, this calculator applies FICA to full gross wages — the error is negligible for most users.

Step 3 — Federal income tax (2024 brackets)

We subtract the 2024 standard deduction from federal taxable wages to get federal taxable income, then apply the IRS 2024 tax brackets:

Rate	Single	Married Filing Jointly	Head of Household
10%	$0–$11,600	$0–$23,200	$0–$16,550
12%	$11,601–$47,150	$23,201–$94,300	$16,551–$63,100
22%	$47,151–$100,525	$94,301–$201,050	$63,101–$100,500
24%	$100,526–$191,950	$201,051–$383,900	$100,501–$191,950
32%	$191,951–$243,725	$383,901–$487,450	$191,951–$243,700
35%	$243,726–$609,350	$487,451–$731,200	$243,701–$609,350
37%	$609,351+	$731,201+	$609,351+

Standard deductions: Single $14,600 · Married $29,200 · Head of household $21,900. Source: IRS Rev. Proc. 2023-34.

Step 4 — FICA taxes

Social Security: 6.2% on wages up to $168,600 (2024 wage base). Source: SSA.gov.
Medicare: 1.45% on all wages.
Additional Medicare: 0.9% on wages above $200,000 (single) or $250,000 (married filing jointly). Source: IRS Notice 2013-45.

Step 5 — State income tax

State taxable income is calculated as federal taxable wages minus the state's own standard deduction (where applicable). We then apply 2024 state tax brackets or flat rates.

States with no income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.

Flat-rate states: Colorado (4.4%), Illinois (4.95%), Indiana (3.15%), Kentucky (4.0%), Massachusetts (5.0%), Michigan (4.25%), North Carolina (4.75%), Pennsylvania (3.07%), Utah (4.65%).

All other states use progressive brackets. Data sourced from each state's department of revenue as published for tax year 2024.

Step 6 — State-specific taxes

Some states levy additional employee payroll taxes:

California SDI: 0.9% on all wages (State Disability Insurance). Source: CA EDD.
New Jersey SDI/TDI & FLI: 0.09% each, on wages up to $161,400. Source: NJ DOL.

Step 7 — Per-period calculation

All annual figures are divided by the number of pay periods: weekly 52, bi-weekly 26, semi-monthly 24, monthly 12, annually 1.

Step 8 — Net pay

netPay = grossPay
       − federalIncomeTax
       − socialSecurity
       − medicare
       − additionalMedicare
       − stateIncomeTax
       − stateOtherTaxes
       − preTaxDeductions
       − postTaxDeductions
       − additionalFederalWithholding
       − additionalStateWithholding

Limitations

Does not calculate tax credits (child tax credit, earned income credit, etc.).
Does not account for Alternative Minimum Tax (AMT).
Does not handle itemized deductions above the standard deduction.
Does not account for local/city income taxes (e.g., New York City, Philadelphia).
Self-employment income is not covered — the self-employment tax rate differs from W-2 employment.

Data sources

Federal brackets: IRS Publication 15-T (2024)
Social Security wage base: Social Security Administration (SSA.gov)
State rates: Individual state department of revenue websites (2024 tax year)
California SDI: California Employment Development Department (EDD)
New Jersey TDI/FLI: New Jersey Department of Labor

Always verify with a qualified tax professional for your specific situation. Tax laws change; rates above reflect the 2024 tax year. PaycheckTaxCalc makes no warranty of accuracy.