How Take-Home Pay Is Calculated in the US

Five separate taxes come out of a US paycheck, each with its own base and its own rules. Here is each one, worked through on the same salary.

By Efe Arda Ergez · Published 21 September 2026

The short answer

Take-home pay is gross salary minus five kinds of deduction: federal income tax, Social Security, Medicare, state income tax and, in some places, local income tax or a state payroll levy. A single filer earning $75,000 in 2026 keeps $61,593 in Texas, which has no state income tax, and $57,843 in California — $3,750 a year apart on the same salary.

Each layer has its own base and its own rules, which is why a simple “tax rate” never quite explains a paycheck. The rest of this guide takes $75,000 in California through every step, then shows how the same salary lands elsewhere.

1. Federal income tax

The federal tax starts from your income minus the standard deduction — $16,100 for a single filer in 2026. On $75,000 that leaves $58,900 of taxable income, which is taxed in bands. Each rate applies only to the slice of income inside its band:

10% on $0–$12,400: $12,400 × 10% = $1,240
12% on $12,400–$50,400: $38,000 × 12% = $4,560
22% on $50,400–$58,900: $8,500 × 22% = $1,870

That totals $7,670. The top band reached, 22%, is the marginal rate: it applies to the next dollar earned, not to the whole salary. Moving into a higher band never reduces take-home pay, because only the income above the band’s threshold is taxed at the new rate.

2 and 3. Social Security and Medicare

Together called FICA, these are flat percentages of wages with no standard deduction:

Social Security: 6.2% of wages up to $184,500 a year, and nothing above that. On $75,000: $4,650.
Medicare: 1.45% of all wages, plus an extra 0.9% above $200,000 for a single filer. On $75,000: $1,088.

FICA is the same in every state: $5,738 on this salary whether you live in California or Texas.

4. State income tax

States set their own rules. Most start from federal adjusted gross income and apply their own deduction and brackets; some use one flat rate; 9 levy no tax on wages at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.

California applies its own deduction and brackets to reach $69,294 of taxable income and $2,775 of state tax, with a top band of 8% at this salary. New York, on the same salary, takes $3,453.

5. Local taxes and state payroll levies

Some cities and counties tax income too. Living in New York City adds $2,472 of city tax to the New York example, cutting take-home from $57,816 to $55,343.

A few states also run insurance programmes funded from payroll. California’s State Disability Insurance (SDI) takes $975 of this salary. It is not an income tax, but it comes out of the same paycheck.

Putting it together

For $75,000, single, in California:

Federal income tax: $7,670
Social Security and Medicare: $5,738
California income tax: $2,775
State Disability Insurance: $975
Total: $17,157, an effective rate of 22.9%
Take-home: $57,843 a year, $4,820 a month, $2,225 every two weeks

The combined marginal rate — the share of the next dollar that goes to all of these together — is 39% here, much higher than the 22.9% average. That gap is why a raise feels smaller than expected: it is taxed at the marginal rate, not the average one.

How a 401(k) changes the picture

Pre-tax retirement contributions come off the income-tax base but not off FICA. Putting $5,000 into a 401(k) on the California salary lowers the year’s taxes by $1,500, so take-home falls by only $3,500 while $5,000 is saved: $54,343 instead of $57,843.

The same salary in the ten largest states

Take-home pay on $75,000, single filer, 2026, in the ten most populous states (state tax includes state payroll levies; no local tax)
State	State tax	Take-home	A month
Texas	$0	$61,593	$5,133
Florida	$0	$61,593	$5,133
Ohio	$1,280	$60,312	$5,026
Pennsylvania	$2,355	$59,238	$4,936
North Carolina	$2,484	$59,109	$4,926
Michigan	$2,937	$58,656	$4,888
Georgia	$3,144	$58,449	$4,871
Illinois	$3,568	$58,025	$4,835
California	$3,750	$57,843	$4,820
New York	$3,777	$57,816	$4,818

What this leaves out

These figures use the standard deduction and no credits. Itemised deductions, the child tax credit, the earned income credit, health-insurance premiums taken pre-tax and other benefits all change the result, as does filing jointly. Employers also withhold on a schedule that only approximates the final bill, so a paycheck can differ from the annual figure divided evenly; the difference comes back, or is owed, when you file.

Calculators used in this guide

Federal: IRS Rev. Proc. 2025-32 for tax year 2026, and the SSA contribution and benefit base. States: each state's department of revenue, tax year 2026. Every figure on this page is computed at build time from the same data and code as those calculators; the formulas are on the Methodology page.