How is take-home pay calculated?

We start from your annual gross salary, subtract pretax 401(k) and HSA, apply the 2024 federal brackets to taxable income (after the $14,600 single / $29,200 MFJ standard deduction), add FICA (Social Security 6.2% up to $168,600 + Medicare 1.45% + 0.9% additional Medicare over $200k single / $250k MFJ), then subtract flat state tax. Net pay is divided by the number of pay periods in the year.

Why does 401(k) reduce federal tax but not FICA?

Traditional 401(k) contributions are pretax for federal and most state income tax, but the IRS still treats them as wages for Social Security and Medicare. HSA contributions made through payroll (cafeteria plan) are pretax for both, which is why HSA reduces FICA but 401(k) does not.

Does this include state and local taxes?

We support an optional flat state income tax rate. Real state systems are often progressive, with their own brackets and deductions, and local/city taxes are not modeled. Use this calculator as an estimate, not a substitute for payroll software.

What is the additional Medicare tax?

The Affordable Care Act added a 0.9% Medicare surtax on wages over $200,000 for single filers and $250,000 for married filing jointly. It is in addition to the regular 1.45% Medicare rate and only employees pay it.