How to Calculate Net Pay from Your Pay Stub
Knowing how to calculate your own net pay — the actual money deposited in your account after taxes and deductions — gives you the power to verify your paycheck, budget accurately, and plan your finances. This guide walks through the full calculation from gross pay to take-home pay, with examples.
The Net Pay Formula
Net Pay =
Gross Pay
− Pre-Tax Deductions
− Federal Income Tax
− Social Security Tax (6.2%)
− Medicare Tax (1.45%)
− State Income Tax
− Post-Tax Deductions
= Net Pay (Take-Home)
Step 1: Determine Your Gross Pay
Gross pay is your total compensation before any deductions. How you calculate it depends on your pay type:
Salaried Employees
Divide annual salary by the number of pay periods per year:
Weekly (52): $65,000 ÷ 52 = $1,250.00/period
Biweekly (26): $65,000 ÷ 26 = $2,500.00/period
Semi-monthly (24): $65,000 ÷ 24 = $2,708.33/period
Monthly (12): $65,000 ÷ 12 = $5,416.67/period
Hourly Employees
Multiply hours worked by your hourly rate, then add overtime:
Regular: 78 hrs × $18.00 = $1,404.00
Overtime: 2 hrs × $27.00 (1.5×) = $54.00
Gross Pay: $1,458.00
Step 2: Subtract Pre-Tax Deductions
Pre-tax deductions reduce your taxable income before taxes are applied. For our example, we'll use a $65,000 salary (biweekly: $2,500 gross) with the following pre-tax deductions:
Step 3: Calculate Federal Income Tax
Federal income tax withholding is the most complex part of the calculation. The IRS provides withholding tables in Publication 15-T organized by pay frequency and filing status.
For a quick estimate using the percentage method: take your per-period taxable wages, annualize them (multiply by pay periods), subtract the standard deduction, apply the 2026 tax brackets to find annual tax, then divide by pay periods.
Example: $2,240 taxable wages, biweekly, Single filer
Annualized taxable wages: $2,240 × 26 = $58,240
Subtract standard deduction: $58,240 − $15,000 = $43,240 AGI
10% bracket (0–$11,600): $11,600 × 10% = $1,160
12% bracket ($11,600–$43,240): $31,640 × 12% = $3,797
Annual tax estimate: $4,957
Per-period federal tax: $4,957 ÷ 26 = $190.65
Note: Actual withholding tables account for the W-4 more precisely. This is a simplified estimation.
Step 4: Calculate FICA Taxes
FICA taxes apply to gross wages (before pre-tax deductions in most cases), not the reduced taxable wages used for income tax purposes. However, wages paid under a qualified Section 125 cafeteria plan (health, dental, vision, FSA) do reduce FICA wages.
FICA on gross wages of $2,500
Step 5: Calculate State Income Tax
State tax rates vary dramatically. For this example, we'll use Texas (no state income tax) and California for comparison:
Texas
State Income Tax: $0.00
No state income tax
California
State Income Tax: ~$115.00
Estimated at ~5.1% effective rate
Step 6: Put It All Together
The same salary in California would yield approximately $1,743 per paycheck — about $115 less due to state income tax.
Common Net Pay Calculation Mistakes
- Applying the income tax rate to gross instead of taxable wages (forgetting pre-tax deductions)
- Forgetting that FICA applies to gross wages, not reduced taxable wages
- Using the marginal tax rate as if it applies to all income (it's only the rate on the top slice)
- Ignoring the Additional Medicare Tax for high earners
- Not accounting for local income taxes in cities like New York City or Philadelphia
Skip the Math — Use the Calculator
Our free paycheck calculator handles all of these calculations automatically for any salary, state, filing status, and pay frequency. Get your net pay estimate in seconds — updated for 2026 tax brackets.