How to Calculate Your Net Pay? Step by Step

You know your salary. You know roughly how often you get paid. And yet somehow the number that actually lands in your account never quite matches what you expected.

That gap isn't random. It's just a series of small, predictable steps stacked on top of each other. Let's walk through them one at a time.

Start with gross pay

Everything begins with gross pay — the number before anything gets taken out.

If you're salaried, this is easy. Take your annual salary and divide it by however many paychecks you get a year. Paid biweekly on a $65,000 salary? That's $65,000 ÷ 26, or about $2,500 per paycheck, before taxes.

If you're hourly, multiply your rate by hours worked, then by your pay periods. $22/hour at 40 hours a week comes out to $880 a week, or roughly $45,760 a year.

Either way, this number is your starting point. Everything from here only subtracts from it.

Subtract federal income tax

Federal tax is the first big chunk, and it works differently than most people assume.

It's not a flat percentage of your whole income. It's progressive — your income gets sliced into brackets, and each slice gets taxed at its own rate.

So if you're single and made $60,000 this year, you're not paying one flat rate on all $60,000. The first chunk is taxed at 10%, the next chunk at 12%, and so on, only reaching higher rates on the portion of income that falls into those higher brackets.

Before any of that math happens, though, your taxable income gets reduced by the standard deduction first. For 2026, that's $16,100 if you're single. So that $60,000 salary is actually taxed as if it were $43,900.

Subtract state income tax (if your state has one)

This step depends entirely on where you live.

Nine states — Texas, Florida, Nevada, and a handful of others — don't tax wage income at all. If you're in one of these, skip this step completely.

Everywhere else, your state applies its own tax, sometimes a flat rate, sometimes its own set of brackets similar to the federal system. California and New York, for example, both use bracketed systems with their own standard deductions, separate from the federal one.

Subtract FICA

FICA covers Social Security and Medicare, and it's the same nationwide no matter what state you're in.

Social Security takes 6.2% of your income, up to a cap. In 2026, that cap sits at $184,500 — once you've earned that much in a year, Social Security stops being withheld for the rest of the year.

Medicare takes 1.45%, with no cap at all. If you're a high earner — above $200,000 single, or $250,000 married filing jointly — an extra 0.9% Medicare tax kicks in on the amount above that threshold.

Whatever's left is your net pay

Add up federal tax, state tax, and FICA. Subtract that total from your gross pay. What remains is your net pay — the actual number that hits your bank account.

On paper, this all sounds straightforward. In practice, doing this math by hand for your specific bracket, your specific state, and your specific filing status gets tedious fast — which is honestly the whole reason calculators like this exist in the first place.

How to Calculate Your Net Pay - A quick real example

Say you're single, earning $70,000 a year, paid biweekly, living in Texas.

Gross pay per paycheck: $70,000 ÷ 26 = $2,692.

Federal tax eats into that based on your bracket after the standard deduction. State tax is $0, since Texas doesn't tax wages. FICA takes 6.2% for Social Security and 1.45% for Medicare off the top.

Whatever's left after all three is your real take-home pay for that paycheck — usually noticeably less than that initial $2,692, which is exactly the moment most people go "wait, where did the rest of it go?"

One thing this doesn't include

This walkthrough covers the tax side only. Your actual paycheck might also have 401k contributions, health insurance premiums, or other benefits taken out before taxes are even calculated — which would make your real take-home pay a bit different from a tax-only estimate like this one.

Skip the manual math

If you'd rather not run these numbers by hand every time your salary changes or you're comparing job offers, our paycheck calculator does this entire walkthrough instantly — just plug in your salary, filing status, and state.

Frequently Asked Questions(FAQs)

1) What is the difference between gross pay and net pay?

Gross pay is what you earn before anything is taken out. Net pay is what's left after taxes and deductions — the actual amount that hits your bank account. Net pay is always the smaller number.

2) How much tax is deducted from a paycheck?

It depends on your income, filing status, and state, so there's no single answer. As a rough sense, most people lose somewhere between 20% and 35% of their gross pay to federal tax, state tax, and FICA combined — higher earners and people in high-tax states land toward the top of that range.

3) What is the FICA tax on my paycheck?

FICA is 6.2% for Social Security and 1.45% for Medicare, taken directly from every paycheck. Social Security stops being withheld once you hit the annual wage base cap; Medicare never stops, and actually increases slightly for high earners.

4) How do I figure out my take-home pay if I'm paid hourly?

Multiply your hourly rate by your hours worked to get gross pay for that period, then run that number through the same federal, state, and FICA steps above. The only real difference from salaried pay is that extra multiplication step at the start.

5) Why is my paycheck lower than my calculated salary?

Because the salary number you were quoted is gross pay, not what you actually take home. Taxes and FICA come out before you ever see the money, and if you have 401k contributions or health insurance premiums, those typically come out too — which is exactly why the number on your offer letter never matches the number in your bank account.