How Salary After Tax Is Calculated in the United States
Last updated: January 2025
When you receive a job offer or look at your paycheck, the number you see as your salary is your gross income. But that's not what ends up in your bank account. Your actual take-home pay—your net salary—is what remains after various taxes are deducted.
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Calculate Your Salary After Tax →The Three Main Deductions
Your salary is reduced by three types of deductions before you receive your paycheck:
1. Federal Income Tax
The federal government taxes your income using a progressive bracket system. This means different portions of your income are taxed at different rates. For 2024-2025, the brackets for single filers are:
| Income Range | Tax Rate |
|---|---|
| $0 – $11,600 | 10% |
| $11,601 – $47,150 | 12% |
| $47,151 – $100,525 | 22% |
| $100,526 – $191,950 | 24% |
| $191,951 – $243,725 | 32% |
| $243,726 – $609,350 | 35% |
| Over $609,350 | 37% |
Before these rates are applied, you can subtract the standard deduction ($14,600 for single filers in 2024). This reduces your taxable income.
2. State Income Tax
Most states have their own income tax, which is calculated separately from federal tax. State tax systems vary significantly:
- No income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming
- Flat tax: States like Colorado (4.4%), Illinois (4.95%), and Pennsylvania (3.07%) charge the same rate for all income levels
- Progressive tax: States like California (1% to 14.4%) and New York (4% to 10.9%) use brackets similar to federal taxes
3. FICA Taxes (Social Security and Medicare)
FICA stands for Federal Insurance Contributions Act. These taxes fund Social Security and Medicare programs:
- Social Security: 6.2% of your income up to $168,600 (2024 limit)
- Medicare: 1.45% of all income, plus an additional 0.9% on income over $200,000
Unlike income taxes, FICA taxes have no deductions—they're calculated on your full gross salary.
Why Net Salary Matters More Than Gross Salary
Your gross salary is useful for comparing job offers on paper, but your net salary is what actually determines your purchasing power. Two jobs with the same gross salary can result in very different take-home pay depending on:
- The state where you work
- Pre-tax deductions like 401(k) contributions or health insurance
- Your filing status and personal exemptions
Example Calculation
Here's how the taxes break down for a $75,000 salary in New York (single filer):
Disclaimer
The calculations on this website are estimates based on standard deductions and tax brackets. Your actual tax liability may differ based on your specific situation, including additional deductions, credits, local taxes, and other factors. This is not tax advice. Consult a qualified tax professional for accurate guidance.
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