💵 Finance · Net Income

How to Calculate
Net Income

Find your real take-home pay after federal tax, Social Security, Medicare, and state taxes — with a full deduction breakdown.

The Net Income Formula

What you actually take home:

Net Income = Gross Income – All Deductions
Federal tax = progressive brackets
Social Security = 6.2% (up to $168,600)
Medicare = 1.45% (all income)
State tax = varies by state
💡 Rule of thumb: Most people take home 65–80% of their gross salary after all taxes. Higher earners keep a smaller percentage.

Take-Home Pay Calculator

Annual Take-Home Pay
$0
Monthly: $0
Gross Salary$0
Federal Income Tax–$0
Social Security (6.2%)–$0
Medicare (1.45%)–$0
State Tax–$0
401k–$0
Take-Home Pay$0

Step-by-Step Guide

1

Start with gross salary

This is your salary before any deductions — what your employer pays you.

2

Subtract pre-tax deductions

401k contributions, HSA, FSA reduce your taxable income before federal and state taxes are applied.

3

Calculate FICA taxes

Social Security: 6.2% on earnings up to $168,600. Medicare: 1.45% on all earnings. These apply to gross income.

4

Calculate federal + state income tax

Apply the standard deduction, then use progressive brackets for federal tax. Add your state's flat or progressive rate.

Worked Examples

$45,000 Salary

Federal: ~$3,200
FICA: ~$3,443
State (5%): ~$2,250
~$36,100/yr take-home

$75,000 Salary

Federal: ~$8,341
FICA: ~$5,738
State (5%): ~$3,750
~$57,200/yr take-home

$120,000 Salary

Federal: ~$18,900
FICA: ~$9,180
State (5%): ~$6,000
~$85,900/yr take-home

No State Tax

$80,000 in TX/FL
Federal+FICA only
No state deduction
~$60,800/yr take-home

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Frequently Asked Questions

What is the difference between gross and net income? ▾
Gross income is your total pay before deductions. Net income (take-home pay) is what you actually receive after federal taxes, FICA, state taxes, and other deductions are subtracted.
What percentage of my paycheck goes to taxes? ▾
For most middle-income earners, total taxes (federal + FICA + state) take about 20–30% of gross income. Lower earners pay a smaller percentage, higher earners pay more.
Does a 401k contribution reduce my taxes? ▾
Yes — traditional 401k contributions are pre-tax, meaning they reduce your taxable income for federal and state income tax purposes. However, FICA (Social Security and Medicare) is still applied to your full gross salary.
Why does my paycheck change throughout the year? ▾
Social Security tax stops once you hit the annual wage base ($168,600 in 2024). If you exceed this, your paycheck will increase slightly for the rest of the year.