Take home pay = Gross salary - Federal tax - State tax - Social Security (6.2%) - Medicare (1.45%) - Pre-tax deductions. Federal tax uses progressive brackets based on taxable income after the standard deduction ($14,600 single, $29,200 married in 2024).
- Step 1: Subtract pre-tax deductions (401k, health insurance) from gross salary
- Step 2: Subtract standard deduction ($14,600 single / $29,200 married)
- Step 3: Apply federal tax brackets to remaining taxable income
- Step 4: Calculate state tax based on your state's rate
- Step 5: Calculate FICA: 6.2% Social Security + 1.45% Medicare on gross
- Step 6: Subtract all taxes and deductions from gross to get net pay