How to Calculate Your Paycheck in 2026: Step by Step

Your paycheck starts as gross pay, the amount you earned for the pay period, and shrinks through four kinds of deductions before it reaches your bank account: pre-tax benefits, federal income tax withholding, Social Security and Medicare tax, and state and local income tax. After-tax deductions such as Roth 401(k) contributions or wage garnishments come off last. What's left is net pay, or take-home pay.

This guide walks through that calculation one step at a time, using 2026 tax rates, and then applies it to an hourly worker, a salaried worker with a 401(k), and a $60,000 salary in ten states. The figures come from the same engine as our paycheck calculators, which do the whole calculation for every state. If you only want the answer: a single filer earning $25 an hour full-time in Colorado, paid every two weeks, takes home about $1,630.09 of a $2,000.00 paycheck.

Calculate a $52,000 Colorado paycheck →

Step 1: Work out gross pay for the period

For hourly workers, gross pay is hours worked times the hourly rate, plus overtime. Under the federal Fair Labor Standards Act, non-exempt employees earn at least 1.5 times their regular rate for hours over 40 in a workweek. A few states, including California, also require daily overtime. A $22-an-hour worker who works 45 hours in a week earns 40 × $22 = $880 of regular pay plus 5 × $33 = $165 of overtime: $1,045.00 gross for the week. Tips reported to the employer, commissions, bonuses and shift differentials are added to gross pay too.

For salaried workers, gross pay per check is the annual salary divided by the number of pay periods. A $75,000 salary is $2,884.62 biweekly (26 checks), $3,125.00 semimonthly (24 checks), $1,442.31 weekly (52 checks) or $6,250.00 monthly (12 checks). Biweekly pay produces two months each year with three paychecks, which is why biweekly checks are smaller than semimonthly ones on the same salary.

Convert an hourly rate to yearly pay →

Step 2: Subtract pre-tax deductions

Pre-tax deductions come out before income tax is calculated, which lowers the pay that's taxed. The common ones are traditional 401(k), 403(b) or 457 contributions; health, dental and vision insurance premiums paid through a Section 125 cafeteria plan; HSA contributions through payroll; flexible spending account contributions; and transit or parking benefits.

They don't all reduce the same taxes. Section 125 health premiums, HSA and FSA contributions reduce federal income tax, Social Security and Medicare, and state tax in most states. Traditional 401(k) contributions reduce federal income tax and most state income taxes, but not Social Security or Medicare. So a $100 401(k) contribution and a $100 health premium have different effects on your paycheck. Our guide to pre-tax and after-tax deductions covers each one, with 2026 contribution limits.

Step 3: Calculate federal income tax withholding

Federal withholding is the hardest step to do by hand, because it depends on your Form W-4. Employers use the IRS percentage method in Publication 15-T: they annualize your taxable pay for the period, subtract an amount based on your filing status, apply the tax brackets, then divide the result back down to one pay period. For a W-4 with no adjustments, the result is very close to your annual income tax divided by the number of paychecks.

Using that approach for the $25-an-hour Colorado worker: annual pay is $52,000. Subtracting the 2026 standard deduction of $16,100 for a single filer leaves $35,900 of taxable income. The 2026 brackets tax the first $12,400 at 10% ($1,240) and the remaining $23,500 at 12% ($2,820), for $4,060 a year. Divided by 26, that's $156.15 per paycheck.

What you put on your W-4 changes this number. Claiming dependents in Step 3 lowers withholding by the value of the Child Tax Credit. The multiple-jobs box in Step 2 raises it, because each employer otherwise withholds as if its job were your only income. Extra withholding in Step 4(c) adds a flat amount to every check. If your withholding is off, the difference shows up as a refund or a balance due when you file.

See how $52,000 fills the brackets →

Step 4: Calculate Social Security and Medicare

Social Security and Medicare, together called FICA, are the simplest taxes on the check. Social Security is 6.2% of gross pay (minus Section 125 deductions) up to the 2026 wage base of $184,500. Medicare is 1.45% of all pay, with an extra 0.9% on pay above $200,000 for the year. There's no standard deduction and no bracket. On a $2,000.00 paycheck, Social Security is $124.00 and Medicare is $29.00: $153.00 in total.

For most workers, FICA is the same percentage on every check. High earners see it change during the year: once year-to-date pay passes $184,500, Social Security stops for the rest of the year and take-home pay jumps. Our FICA calculator shows the yearly and per-check amounts for any salary, including self-employment tax.

Calculate FICA on $52,000 →

Step 5: Calculate state and local income tax

State income tax varies more than any other line on the paycheck. Nine states don't tax wages at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. About a dozen charge a single flat rate. The rest use graduated brackets with their own deductions. Colorado taxes income at a flat 4.4% of federal taxable income, so on the $25-an-hour example the state tax is 4.4% × $35,900 = $1,580 a year, or $60.75 per check.

Local income taxes come on top in some places. New York City residents pay city income tax of roughly 3% to 3.9%. Nearly every Pennsylvania municipality levies an earned income tax, typically 1% and about 3.75% in Philadelphia. Every Indiana county and every Maryland county has its own rate, and many Ohio cities tax wages at 1% to 2.5%. Some states also withhold small payroll taxes for paid family leave or disability insurance, such as New Jersey, New York, California and Colorado. These usually total well under 1% of pay. Our state paycheck calculators list the local taxes that apply in each state.

Step 6: Subtract after-tax deductions

After-tax deductions come out of pay that has already been taxed. They include Roth 401(k) contributions, after-tax disability or supplemental life insurance, union dues, charitable payroll giving, wage garnishments for child support or debts, and repayments of 401(k) loans. They lower your take-home pay dollar for dollar, but they don't change your taxes.

Putting it together: an hourly worker in Colorado

Here's the full calculation for a single filer earning $25 an hour, 40 hours a week, paid every two weeks in Colorado, with no pre-tax deductions. Gross pay is $2,000.00. Federal income tax withholding is about $156.15. Social Security is $124.00 and Medicare is $29.00. Colorado income tax is about $60.75. Take-home pay is about $1,630.09 per check, or $42,382 a year: 81.5% of gross pay.

Colorado also has a paid family and medical leave premium (FAMLI) shared between employer and employee, which takes a small additional slice of each check, and Denver and a few other cities charge a flat monthly occupational privilege tax of a few dollars. Neither is included in the figures here.

A salaried worker with a 401(k) in New Jersey

A single filer earning $75,000 in New Jersey, paid semimonthly, contributes $150 per check to a traditional 401(k). Gross pay is $3,125.00. The 401(k) contribution comes out first, so federal and New Jersey income tax are calculated on $2,975.00 per check. Federal withholding is about $286.58, Social Security $193.75 and Medicare $45.31 (both on the full gross, because 401(k) contributions don't reduce FICA), and New Jersey income tax about $99.94. Take-home pay is about $2,349.41 per check.

New Jersey also withholds small employee contributions for unemployment, disability and family leave insurance, which reduce the check by a little more. The 401(k) costs less than $150 in take-home pay, because it lowers the income tax on every check.

Run this New Jersey paycheck →

The same salary in ten states

The table shows biweekly take-home pay on a $60,000 salary for a single filer with no pre-tax deductions, in ten states. Federal tax and FICA are identical in every state. The whole difference comes from state income tax, which ranges from nothing in Texas and Florida to the largest amounts in states with graduated brackets. Local income taxes, where they apply, would come on top.

Compare two states side by side →

How pay frequency changes each check

Pay frequency changes the size of each paycheck but not your annual taxes. On a $60,000 salary, a weekly check is about a quarter of a monthly one, and the annual take-home is the same. The table shows gross and net per check at each frequency for a single filer with no state income tax.

Biweekly pay produces 26 checks, so two months a year have three paydays. Many people budget on two checks a month and treat the third as a bonus for savings or debt payments. Semimonthly pay, 24 checks, always falls on fixed dates such as the 15th and the last day of the month. Our guide to biweekly versus semimonthly pay covers the budgeting differences.

Paychecks with overtime, tips and bonuses

Variable pay makes each check different, and withholding follows the size of the check. Because the percentage method annualizes each check as if you earned that much every period, a week with heavy overtime is withheld as if you earned that amount all year, which can push part of it into a higher withholding bracket. The extra is usually returned when you file, since your actual tax is based on your real annual income. A week with $1,045.00 of pay at $22 an hour is withheld as if you earned $54,340 a year, compared with $45,760 in a regular 40-hour week.

Tips reported to your employer are added to gross pay for withholding, even though the cash is already in your pocket. If your tips are large compared with your wages, the employer may not be able to withhold enough from your paycheck, and the shortfall shows up on your W-2 as uncollected tax. From 2025 through 2028, qualified tips and the premium part of overtime pay can be deducted on your federal return, up to $25,000 for tips and $12,500 ($25,000 joint) for overtime. Payroll withholding doesn't take those deductions into account automatically, so the benefit usually arrives as a larger refund unless you lower your withholding on your W-4.

Bonuses and commissions paid separately are usually withheld at a flat 22% federal rate as supplemental wages, rising to 37% on supplemental pay over $1 million in a year. Social Security, Medicare and state tax apply as normal. Several states have their own flat supplemental rates.

Calculate overtime pay after tax →

Checking your withholding during the year

The surest way to avoid a surprise at tax time is to check your withholding once or twice a year, especially after a raise, a new job, marriage, a new child, or a second job. Take the year-to-date federal withholding on your latest pay stub, divide by the number of pay periods so far, and multiply by the number in the year. Compare the result with your estimated tax for the year.

If the projected withholding is well above your estimated tax, you're on track for a refund and could increase take-home pay with a new W-4. If it's below, you're likely to owe; adding an extra amount per check in Step 4(c) of the W-4 fixes it. Our tax refund estimator does this comparison for you, including the Child Tax Credit and the tips and overtime deductions.

Check whether you'll get a refund →

Why your real paycheck might differ

A calculator gives the paycheck for a standard W-4 with the deductions you enter. Real checks differ when your W-4 has adjustments, when you have deductions the calculator doesn't know about, when a bonus is withheld at the flat 22% supplemental rate instead of your regular rate, when you've passed the Social Security wage base, or when your employer withholds local taxes. The first check of the year can also differ if benefit elections changed.

If your take-home pay seems wrong, compare the pay stub line by line with the steps above. Our guide to reading a pay stub explains each line and the abbreviations employers use, such as OASDI for Social Security and FIT for federal income tax.

Do it in one step

The paycheck calculators do all of this for every state: enter your salary or hourly pay, pay frequency, filing status and pre-tax deductions to see each line of the check. To find the salary you'd need for a given take-home amount, use the net to gross calculator.

Open the paycheck calculator for your state →