How your paycheck is calculated
Your employer starts with gross pay for the period and takes out pre-tax deductions first. Traditional 401(k) and 403(b) contributions lower the wages subject to federal income tax but not Social Security or Medicare. Health, dental and vision premiums paid through a section 125 cafeteria plan lower all three.
Federal income tax withholding then comes from IRS Publication 15-T. Payroll systems using the percentage method annualize your taxable wages for the period (multiply by the number of paychecks a year), add any Step 4(a) other income from your W-4, subtract any Step 4(b) deductions and a built-in allowance ($8,600, or $12,900 if married filing jointly, unless you checked Step 2), then apply the 2026 withholding rate table for your filing status. The result is divided back by the number of paychecks, your Step 3 credits are spread across the year, and any Step 4(c) extra withholding is added.
Finally come Social Security at 6.2% and Medicare at 1.45% of your Social Security and Medicare wages. What's left is your take-home pay. This calculator follows those steps exactly for the federal side, using the official 2026 tables.
Withholding is not the same as the tax you owe
Withholding is a prepayment. Your actual federal income tax is worked out on your return from your whole year: all your income, your deductions and your credits. If too much was withheld you get a refund; too little and you owe the difference, and possibly an underpayment penalty.
The W-4 is how you steer that prepayment. Step 2 is for households with more than one job, Step 3 for the child tax credit and other credits, Step 4(a) for income with no withholding (like interest or a side business), Step 4(b) for deductions beyond the standard deduction, and Step 4(c) for a flat extra amount per paycheck. If your withholding looks off, the IRS Tax Withholding Estimator will suggest W-4 entries for your situation. To estimate the tax itself, use the income tax calculator.
The Social Security wage base and Additional Medicare Tax
Social Security tax only applies to the first $184,500 of wages in 2026. If you earn more than that from one employer, 6.2% comes out of every paycheck until your year-to-date wages hit the cap, then it stops for the rest of the year. Because this calculator shows a typical paycheck, it spreads the capped yearly amount evenly across your paychecks and tells you roughly which paycheck the deductions stop in.
Medicare has no cap. Instead, once your wages from one employer pass $200,000 in the year, your employer must also withhold a 0.9% Additional Medicare Tax, whatever your filing status. That's shown the same annualized way. If you have two jobs, each employer applies the wage base separately, so you can overpay Social Security; the excess is credited back on your tax return.
What this calculator leaves out
State and local income taxes are not calculated yet; enter a flat rate if you want a rough figure. It also doesn't include after-tax deductions such as Roth 401(k) contributions, union dues or wage garnishments, and it assumes the same pay every period. Bonuses and other supplemental wages are often withheld at a flat 22% rather than through these tables, so a bonus check can look different from a regular one.
The formulas (Pub 15-T Worksheet 1A)
Adjusted annual wage = (taxable wages per paycheck × paychecks per year) + Step 4(a) − Step 4(b) − allowanceFederal withholding = (table tax on adjusted annual wage ÷ paychecks − Step 3 ÷ paychecks) + Step 4(c)Social Security = 6.2% × wages, up to the yearly wage base; Medicare = 1.45% × wagesTake-home pay = gross pay − pre-tax deductions − federal withholding − Social Security − Medicare- Taxable wages = gross pay minus traditional 401(k) and section 125 deductions
- Allowance = $8,600 ($12,900 if married filing jointly), or $0 if the Step 2 box is checked
- Table tax = column C + column D × (adjusted annual wage − column A) from the matching row of the annual withholding table
- Step 3 credits are never allowed to push withholding below zero
Example
- $65,000 salary paid every two weeks (26 paychecks), single, no other W-4 entries, 5% to a traditional 401(k) and $100 per paycheck in pre-tax health premiums.
- Gross pay is 65,000 ÷ 26 = $2,500.00. The 401(k) takes $125.00, leaving $2,275.00 of wages for federal income tax and $2,400.00 for Social Security and Medicare.
- Adjusted annual wage: 2,275 × 26 = $59,150, minus the $8,600 allowance = $50,550.
- Single standard table row $19,900–$57,900: $1,240 + 12% × (50,550 − 19,900) = $4,918 a year, or $189.15 per paycheck.
- Social Security: 6.2% × $2,400 = $148.80. Medicare: 1.45% × $2,400 = $34.80.
- Take-home pay: 2,500 − 125 − 100 − 189.15 − 148.80 − 34.80 = $1,902.25 per paycheck, or $49,458.40 a year.
Frequently asked questions
How much federal tax comes out of a $65,000 salary?
Paid every two weeks with a single W-4 and no other entries or deductions, federal income tax withholding is about $216.15 per paycheck, Social Security $155.00 and Medicare $36.25, leaving $2,092.60 of $2,500 before any state tax. That's 2026 federal withholding only.
Why doesn't my withholding match my tax bracket?
Your bracket is the rate on your last dollars of income, but most of your pay is taxed at lower rates and the first part not at all, because the withholding tables build in the standard deduction. That's why someone in the 22% bracket typically sees well under 22% of their paycheck go to federal income tax.
What does checking the Step 2 box on Form W-4 do?
It tells payroll to use tables with brackets half as wide and no separate allowance, because you have two jobs or your spouse also works and the standard deduction and lower brackets are being shared. For a single filer, income tax withholding starts once that job's taxable wages pass $8,050 a year, instead of $16,100. The W-4 says to check it on the forms for both jobs, and only when there are two jobs in total; it's generally more accurate than the Multiple Jobs Worksheet when the lower-paying job pays more than half as much as the higher one.
Does a 401(k) contribution lower Social Security and Medicare tax?
No. Traditional 401(k) and 403(b) deferrals reduce the wages subject to federal income tax, but Social Security and Medicare are still taken on them. Section 125 health premiums reduce both.
Why did my Social Security deduction stop late in the year?
Social Security tax only applies to wages up to the yearly wage base, $184,500 for 2026. Once your year-to-date wages from an employer reach it, that employer stops withholding the 6.2% until January.
Why is my actual paycheck slightly different?
Common reasons are state and local taxes, after-tax deductions, employers rounding withholding to the nearest dollar, a different number of pay periods, or your employer using the IRS wage bracket tables instead of the percentage method. The wage bracket tables use pay ranges, so they can differ by a dollar or two.
Sources
Last reviewed for 2026. How we calculate.