How to Calculate Take-Home Pay: Step-by-Step Guide

You only need some information about your tax situation and payroll deductions.

By Catherine Brock – Updated Sep 29, 2024 at 10:13PM

Key Points

You can calculate take-home pay by subtracting deductions and taxes from your salary.
Use IRS tax brackets to estimate federal taxes based on your taxable income and filing status.
Items that reduce your net income include income taxes, payroll taxes, pretax deductions, and after-tax deductions.
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When you accept a new job, you generally know the salary. You may not know your take-home pay, though, and that can be the more important number.

Fortunately, there are two ways to calculate your take-home pay. Let's begin with the hard way. You will need a pencil, paper, and a calculator to get started.

Image source: Getty Images.

Estimate taxable income

To estimate your federal taxes, you first need to quantify your taxable income. This amount is based on three factors:

Your salary, which determines your tax bracket.
How you fill out IRS Form W-4. Your selections on the W-4 should account for any other sources of income and your expected deductions.
Your tax filing status. The options are single, married filing jointly, married filing separately, head of household, or qualifying surviving spouse.

Here are the calculations to quantify your taxable income:

Subtract any estimated pretax items from your salary. These can include your 401(k) contributions, health and life insurance premiums you pay through your employer, and contributions to health savings accounts and flexible spending accounts.
Add the adjusted income number from the first step to any other income you expect this year. Examples include rental income, dividends, interest, or self-employment income. This step assumes you accounted for the extra income when you filled out your W-4.
Subtract your applicable standard deduction amount or estimated itemized deduction amount, whichever is greater. You can find standard deductions in the table below. If you normally itemize deductions, start with last year's deduction and adjust as needed.

FILING STATUS	STANDARD DEDUCTION (2024)
Single	$14,600
Married filing jointly or qualifying widow(er)	$29,200
Married filing separately	$14,600
Head of household	$21,900

Your estimated income, less deductions, is your expected taxable income. With this number, you can use the following tax table to calculate approximately how much federal income tax will be withheld from your paycheck.

Estimate income taxes

The table below shows 2024 tax rates for the two most common filing statuses, single and married filing jointly. See IRS.gov for full tax tables.

Table data source: IRS.gov.
If you are a single filer and your taxable income is ...	Your federal income tax will be ...	If you are a married joint filer and your taxable income is ...	Your federal income tax will be ...
$0 to $11,600	10% of your taxable income	$0 to $23,200	10% of your taxable income
$11,601 to $47,150	$1,160 + 12% of the income over $11,600	$23,201 to $94,300	$2,320 + 12% of the amount over $23,200
$47,151 to $100,525	$5,426 + 22% of the income over $47,150	$94,301 to $201,050	$10,852 + 22% of the amount over $94,300
$100,526 to $191,950	$17,168 + 24% of the income over $100,525	$201,051 to $383,900	$34,337 + 24% of the amount over $201,050
$191,951 to $243,725	$39,110 + 32% of the income over $191,950	$383,901 to $487,450	$78,220 + 32% of the amount over $383,900
$243,726 to $609,350	$55,678 + 35% of the income over $243,725	$487,451 to $731,200	$111,356 + 35% of the amount over $487,450
$609,351 or more	$183,646 + 37% of the income over $609,350	$731,201 or more	$196,668 + 37% of the amount over $731,200

Calculate your federal income taxes using the rules above, then divide the resulting number by 12. This tells you how much should be withheld monthly.

Next, calculate your state taxes and any local taxes you may owe. Each state has a different tax rate, which may be zero. This article from TaxFoundation.org lists state tax rates by filing status.

Estimate payroll taxes

Federal, state, and some local governments charge income taxes. To estimate your take-home pay, you must also account for payroll taxes -- namely, FICA taxes. The two components of FICA are Social Security and Medicare:

Social Security taxes are 6.2% of the first $168,600 you earn in 2024.
Medicare taxes are 1.45% of your income. There is no cap. Single filers additionally pay a 0.9% surtax on earnings over $200,000. Married, joint filers pay the 0.9% surtax on earnings over $250,000.

Apply these percentages to your gross salary, not the lesser taxable income number. Divide your FICA total by 12 so you have a monthly amount.

Estimate deductions

Next, you will total your after-tax payroll deductions, which may include:

Contributions to IRAs or Roth 401(k)s.
Union dues.
Wage garnishments for taxes, child support, or student loans.

Remember to convert these amounts to monthly values. For example, if you're a teacher who pays union dues of $20 from each semi-monthly paycheck, you would convert this amount to the monthly total of $40.

Subtract taxes and deductions

Now you're left with two more math problems:

Divide your annual salary by 12 to calculate your gross monthly income.
Subtract your estimated monthly taxes and deductions from the gross monthly income.

The difference will be your estimated monthly take-home pay.

Admittedly, these calculations can get complicated. You can alternatively use an online payroll calculator like this one that does the math for you.

Example

An example

Let's walk through a simplified example to illustrate the process. Say you landed a new job with a starting salary of $100,000. For this scenario, we'll say you are single and plan to take the standard deduction. You have decided to contribute 10% of your salary to your 401(k) on a pretax basis, and you expect pretax medical premiums will be $5,000 annually.

The table below shows the taxable income calculation based on these assumptions.

SALARY	$100,000
Pre-tax retirement savings (10% of salary)	-$10,000
Health insurance premiums	-$5,000
Standard deduction	-$14,600
Taxable income	$70,400

According to the tax table above, your federal income tax on this income should be $10,541 for the year.

For simplicity's sake, let's say that you live in a state with no state income tax. As shown in the table below, your taxes will include federal income tax and the two FICA components.