The order of subtraction
Gross pay is the starting point: salary divided by the number of pay periods, or hours times the rate. From it come, in this order, the deductions you chose that are taken before tax (retirement plan deferrals, health premiums, flexible spending accounts), then the taxes, then anything taken after tax (Roth contributions, union dues, garnishments). The order matters because the pre-tax items shrink the wages the taxes are computed on, which is what "pre-tax" means.
What each line is
Federal income tax
The only line that depends on your total income for the year. It is computed on your wages after pre-tax deductions and after the standard deduction ($16,100 for a single filer in 2026), through the seven tax brackets from 10 to 37 percent. On the stub it is an estimate based on your Form W-4; the exact amount is settled on your tax return.
Social Security
6.2% of wages, up to a ceiling called the wage base: $184,500 in 2026, per the IRS and the Social Security Administration. Wages above the ceiling pay no Social Security tax for the rest of the year. Your employer pays another 6.2% that does not appear on your stub.
Medicare
1.45% of all wages, with no ceiling, plus an Additional Medicare Tax of 0.9% that employers must withhold on wages over $200,000 in a calendar year, whatever your filing status. The IRS notes there is no employer match for the additional tax; for the basic 1.45% the employer pays the same amount. Social Security and Medicare together are the FICA line, 7.65% of wages below the ceiling.
State and local income tax
Depends entirely on where you work and live. Some states have brackets, some a flat rate, and a few have no income tax; a handful of cities add their own. Some states also withhold for paid family leave or disability insurance. The paycheck calculator has a page for every state with the 2026 rates and the extra programs.
Pre-tax deductions
Traditional 401(k) and similar deferrals (up to $24,500 in 2026, more from age 50) reduce the wages your federal income tax is computed on, but not the wages Social Security and Medicare are charged on. Health, dental and vision premiums paid through a cafeteria plan, and contributions to a health savings account or flexible spending account, reduce both. That difference is worth seeing in the example below. The 401(k) calculator shows what a given percentage does to the paycheck and to the balance over the years.
After-tax deductions
Roth 401(k) contributions, union dues, charitable payroll gifts, wage garnishments and the employee's share of some insurance come out after the taxes have been computed, so they change the net amount but not the tax lines.
A $75,000 salary, gross to net
Single filer, paid every two weeks, 6% into a traditional 401(k), $150 a month of pre-tax health premiums, in a state with no income tax so the federal lines stand alone. Annual figures; divide by 26 for one paycheck.
| Line | Per year | Per paycheck | How it is computed |
|---|---|---|---|
| Gross pay | $75,000 | $2,884.62 | |
| 401(k), 6% pre-tax | −$4,500 | −$173.08 | Reduces federal income tax wages, not Social Security or Medicare wages |
| Health insurance premium, pre-tax | −$1,800 | −$69.23 | Reduces federal income tax and payroll tax wages |
| Federal income tax | −$6,284 | −$241.69 | On $68,700 minus the $16,100 standard deduction, through the 2026 brackets |
| Social Security, 6.2% | −$4,538 | −$174.55 | On $73,200; stops at $184,500 of wages |
| Medicare, 1.45% | −$1,061 | −$40.82 | No wage cap |
| Take-home pay | $56,816 | $2,185.24 |
Take-home pay is 75.8% of gross, and $4,500 of the gap is money that went into the 401(k) rather than to a tax. The federal income tax comes to 8.4% of the salary, less than the 22 percent bracket the salary lands in, because the standard deduction and the lower brackets apply first. Add a state income tax and the net falls further; the calculator shows the state line for all 50 states and the District of Columbia.
Reading your own stub
- Gross, taxable and FICA wages differ. A stub often shows three wage figures; the gaps between them are your pre-tax deductions, and the 401(k) explains why the federal wage is lower than the FICA wage.
- Year-to-date columns tell you where you stand against the Social Security ceiling and the $200,000 Medicare threshold.
- Hourly pay turns into the same lines; the hourly rate calculator and the salary converter move between hourly, annual and per-paycheck figures so you can compare with the stub.
- Withholding is adjustable. If the refund each spring is large, the W-4 is set to withhold more than the tax; the IRS withholding tables and the calculator show what a different W-4 would do per check.
Frequently asked questions
Why is my take-home pay so much less than my salary?
Four deductions do most of it: federal income tax, Social Security (6.2%), Medicare (1.45%) and state income tax where there is one, plus anything you chose such as retirement contributions and health premiums. In the example on this page a $75,000 salary becomes $56,816 of take-home pay, 75.8% of the gross, before state tax.
What is FICA on my pay stub?
The Federal Insurance Contributions Act taxes: Social Security at 6.2% of wages up to $184,500 in 2026 and Medicare at 1.45% of all wages, with an extra 0.9% withheld on wages over $200,000 in a year. Your employer pays the same 6.2% and 1.45% on top, which is not shown as a deduction.
Why did my paycheck go up near the end of the year?
Because your wages passed the Social Security wage base, $184,500 in 2026. Above that no Social Security tax is withheld for the rest of the year, so a high earner's net pay rises by 6.2% of gross from that point. Medicare has no cap, and the extra 0.9% Medicare tax starts at $200,000, so very high earners see a small step the other way.
Do 401(k) contributions reduce Social Security tax?
No. Traditional 401(k) deferrals reduce the wages your federal income tax is computed on, but Social Security and Medicare are charged on the wages before the deferral. Pre-tax health premiums under a cafeteria plan reduce both. That is why the two lines in the example use different wage figures.
Is the federal withholding on my stub my actual tax?
It is an estimate based on your Form W-4 and the pay period. The real tax is settled on your return in the spring, and the difference becomes a refund or a bill. A large refund means too much was withheld during the year; adjusting the W-4 moves that money back into the paychecks.
Sources
- IRS Tax Topic 751: Social Security and Medicare withholding rates (6.2% and 1.45% each for employee and employer, Additional Medicare Tax of 0.9% over $200,000, 2026 wage base $184,500, no Medicare wage cap)
- Social Security Administration: 2026 fact sheet (maximum taxable earnings)
- IRS Revenue Procedure 2025-32: 2026 tax brackets and standard deduction (PDF)
- IRS Publication 15 (Circular E), section 15: elective 401(k) deferrals are generally exempt from income tax withholding but taxable for Social Security and Medicare
- IRS Publication 15-B, table 2-1: accident and health benefits under a cafeteria plan are exempt from income tax withholding and from Social Security and Medicare
- IRS: 401(k) contribution limits ($24,500 for 2026)