How Paycheck Withholding Works
The same three layers apply to almost every paycheck in the U.S.: federal income tax, FICA, and (in most states) state income tax. Here's exactly how each one is calculated, and how this site's calculators compute them.
1. Federal income tax
Federal income tax is calculated on taxable income, not your full gross pay. Taxable income is gross pay minus your standard deduction, which depends on your filing status. For 2026, the standard deductions are $16,100 for single or married filing separately, $32,200 for married filing jointly, and $24,150 for head of household.
The tax itself is calculated using marginal tax brackets: each bracket's rate only applies to the slice of income that falls inside it, not your whole income. For 2026, there are seven brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Someone with $75,000 in taxable income isn't taxed at 22% on the full $75,000; the first roughly $12,400 is taxed at 10%, the next roughly $38,000 at 12%, and only the remainder at 22%. That's why an extra dollar of income never pushes your entire paycheck into a higher bracket; it only affects the tax on that last dollar.
Source: IRS Rev. Proc. 2025-32, Section 4.01 (tax rate tables) and Section 4.14 (standard deduction): irs.gov/pub/irs-drop/rp-25-32.pdf.
2. FICA (Social Security & Medicare)
FICA is a flat payroll tax that funds Social Security and Medicare, and it's separate from federal income tax: it applies to gross pay directly, with no standard deduction subtracted first. It has three parts:
- Social Security: 6.2%, but only up to the annual wage base ($184,500 for 2026). Above that amount, no additional Social Security tax is withheld for the rest of the year.
- Medicare: 1.45% on all wages, with no cap.
- Additional Medicare: 0.9% on wages above $200,000 (single or head of household), $250,000 (married filing jointly), or $125,000 (married filing separately); this extra amount applies only to the portion of income above the threshold.
Source: SSA 2026 wage-base announcement; IRS Pub 926.
3. State income tax
State tax is where paychecks diverge the most. Nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming) have no tax on wage income at all, so only federal tax and FICA apply. The remaining states either charge a single flat rate on all income, or use their own bracket structure similar to the federal system. A handful of states (parts of Ohio, Pennsylvania, and Maryland, for example) add a local or county-level tax on top of the state rate, which a simple state-only calculation would miss.
Each state's paycheck calculator on this site states its state's exact tax structure and when that figure was last verified against that state's own Department of Revenue.
4. Putting it together
Take-home pay is: gross pay − federal tax − FICA − state tax = net pay. This site's calculators show every step of that as a labeled breakdown, not just a final number, specifically so you can see which layer is taking what.
This is a general explanation of how withholding works, not a substitute for advice about your specific situation: pre-tax deductions (401(k), health insurance premiums), tax credits, additional withholding elected on a W-4, and local taxes can all change the result. See the full disclaimer for what these calculators do and don't account for. Tax data last verified: 2026-08-08.