How the Gross to Net Calculator works
Gross pay is what your job pays before anything is withheld. Net pay — also called take-home pay — is what actually lands in your bank account after taxes and deductions come out. This calculator walks through the standard payroll subtraction: gross pay, minus pre-tax deductions, minus federal and state income tax, minus FICA (Social Security and Medicare), equals net pay.
The formula
For a chosen pay frequency, the calculator first annualizes your inputs: annual gross = gross pay per period × pay periods per year. Pre-tax deductions (401(k) contributions, health premiums, FSA/HSA contributions, and similar) are subtracted first to get taxable income:
Taxable income = Annual gross − Annual pre-tax deductions
Federal and state/local income tax are then applied as the flat effective rates you enter:
Federal tax = Taxable income × federal rate, and State tax = Taxable income × state rate
FICA payroll taxes are calculated separately, using the statutory rates set by law:
Social Security tax = 6.2% × min(taxable income, $176,100) — the 2025 annual wage base, above which no further Social Security tax applies.
Medicare tax = 1.45% × taxable income + 0.9% × (taxable income above $200,000) — the 0.9% Additional Medicare Tax applies only to earnings over that threshold.
Finally: Net pay = Annual gross − Annual pre-tax deductions − Federal tax − State tax − Social Security tax − Medicare tax, divided by the number of pay periods to get the per-period figure.
Worked example
Take a biweekly gross pay of $5,000 (26 pay periods, $130,000/year), with $200 per period ($5,200/year) in pre-tax deductions, a 12% federal rate, and a 4% state rate. Taxable income is $124,800. Federal tax is about $14,976 and state tax about $4,992. Social Security tax is 6.2% of $124,800 ≈ $7,738 (under the wage base, so no cap applies). Medicare tax is 1.45% of $124,800 ≈ $1,810 (below the $200,000 Additional Medicare Tax threshold). Total annual tax is roughly $29,516, leaving net pay of about $95,284 per year, or around $3,665 per biweekly paycheck.
Why the calculator uses flat tax rates
Actual federal withholding runs through IRS bracket tables that depend on filing status, W-4 elections, and the standard deduction — details that change every tax year and differ for every employee. Rather than guess at those, this calculator asks for a single effective federal rate and a single effective state/local rate, which you can pull from a recent pay stub, a tax return, or a bracket estimate of your own. This keeps every step of the math visible and reproducible, at the cost of not matching payroll withholding to the exact dollar.
What the FICA assumption means
FICA (Social Security and Medicare) is calculated on the same taxable-income figure as income tax, which assumes pre-tax deductions are Section 125 cafeteria-plan benefits (like employer health insurance) that reduce FICA wages as well as income tax. Traditional 401(k) and 403(b) contributions reduce income tax but not FICA wages under actual IRS rules — if your pre-tax deductions are mostly retirement contributions, your real FICA taxes will be slightly higher than shown here, and net pay slightly lower.
What moves net pay most
- Pay frequency changes the per-period number but not the annual total — weekly, biweekly, semimonthly, monthly, and annual figures for the same job all reduce to the same yearly net pay.
- Pre-tax deductions lower taxable income directly, which reduces income tax and (in this calculator's model) FICA too, so raising a 401(k) contribution shrinks net pay by less than the contribution amount.
- Tax rates have the largest single effect on higher incomes, since federal and state tax scale with taxable income while Social Security tax stops growing once wages pass the annual wage base.