How to Calculate Your Take-Home Pay
A step-by-step walkthrough of turning a salary into the number that lands in your bank account, including the deductions people forget.
A $75,000 offer does not deposit $75,000. Depending on your state and benefits, somewhere between 20 and 35 percent disappears before the money reaches you. Knowing the order of operations makes the first paycheck far less surprising.
Step 1: start with gross pay
Gross pay is the salary converted to the pay period. A $75,000 salary is $6,250 a month, $2,884.62 biweekly, or $1,442.31 weekly. This is the number in the offer letter, and it is the largest number you will see.
Step 2: subtract pre-tax deductions
These come out before income tax is calculated, which makes them cheaper than they look.
- Traditional 401(k) or 403(b) contributions: the headline retirement vehicle.
- Health, dental and vision insurance premiums, if offered through a cafeteria plan.
- Health Savings Account contributions, if you are on a high-deductible plan.
- Flexible spending accounts for dependent care or medical expenses.
- Commuter benefits and, in some cases, life insurance premiums.
A 5 percent 401(k) contribution on $75,000 is $3,750, which changes the taxable income used for federal withholding to $71,250 before the standard deduction even applies.
Step 3: apply federal income tax withholding
Withholding is an estimate of your annual tax liability, spread across pay periods according to the W-4 you filed. Employers use IRS Publication 15-T tables, which approximate the progressive brackets.
On $71,250 of adjusted gross income with the $16,100 standard deduction, taxable income is $55,150. Federal tax is $6,845, which is about $263 per biweekly paycheck.
Step 4: subtract FICA
Payroll taxes are not affected by the W-4 or by pre-tax contributions to a 401(k). You pay 6.2 percent for Social Security on wages up to $184,500 in 2026, and 1.45 percent for Medicare on every dollar. Employers match this, but their share does not appear on your paycheck.
| Deduction | Rate | On $75,000 |
|---|---|---|
| Social Security | 6.2% up to $184,500 | $4,650 |
| Medicare | 1.45% on all wages | $1,087.50 |
| Total FICA | 7.65% | $5,737.50 |
Step 5: subtract state and local tax
This is the least predictable line. Nine states levy no tax on wage income. Others, like California and New York, have graduated rates that reach into double digits plus local add-ons like New York City's income tax.
For a rough estimate, apply your marginal state rate to gross income. For precision, use your state's withholding tables, which most departments of revenue publish.
Putting it together
Take $75,000 gross. Subtract $3,750 for the 401(k) and $5,737.50 for FICA. Subtract $6,845 in federal income tax and, at an illustrative 5 percent state rate applied to the $71,250, $3,562.50. The result is $55,105 a year, or $2,119 per biweekly paycheck.
Deductions people forget
- Garnishments and child support, which come out after tax.
- Union dues and professional association fees.
- Employer-provided life insurance above $50,000 of coverage, which is imputed income.
- Relocation repayments and signing bonus clawbacks: these are usually net-of-tax and land harder than expected.
The only way to know your real number is to run it with your own filing status, state and benefit elections. Guessing from the salary alone is off by hundreds of dollars a month.