What Comes Out of Your Paycheck? Gross vs Net Pay Explained
Your gross pay is your salary before anything is taken out. Your net pay, also called take-home pay, is what is left after taxes and deductions. The gap usually comes from federal income tax, Social Security (6.2%), Medicare (1.45%), state tax in most states, and any benefits you pay for. Here is how each item works, with a real example.
An example paycheck
This is a $60,000 salary, single filer, paid every two weeks in Nevada (a state with no income tax on wages), no 401(k):
| Item | Per paycheck |
|---|---|
| Gross pay | $2,307.69 |
| Federal income tax | -$193.08 |
| Social Security | -$143.08 |
| Medicare | -$33.46 |
| State income tax | $0.00 |
| Net pay | $1,938.08 |
That is $50,390 a year in take-home pay. You can try your own salary in the paycheck calculator.
Federal income tax withholding
Your employer estimates your yearly income tax and takes a portion out of each paycheck. The estimate is based on your Form W-4, which lists your filing status and other adjustments. Because it is an estimate, you may get a refund or owe tax when you file your return. The federal income tax calculator shows how the tax brackets work.
Social Security and Medicare (FICA)
- Social Security: 6.2% of wages up to a yearly limit ($184,500 in 2026).
- Medicare: 1.45% of all wages. An extra 0.9% applies to wages above $200,000 for single filers.
Your employer pays a matching share, which does not come out of your pay. Self-employed people pay both shares. The self-employment tax calculator shows that.
State and local taxes
Nine states do not tax regular wages, including Texas, Florida, Nevada and Washington. Others have flat or graduated rates, such as California and New York. Some cities and counties add a local income tax, and a few states add small payroll charges for disability or family leave insurance. Each of our state pages explains the rules for that state.
Pre-tax and post-tax deductions
Pre-tax deductions reduce your taxable income. Common examples are traditional 401(k) contributions, health insurance premiums, and HSA or FSA contributions. Post-tax deductions come out after tax, such as Roth 401(k) contributions or wage garnishments. A pre-tax deduction lowers your income tax, so your take-home pay falls by less than the amount you contribute. For example, see how a traditional 401(k) works in our $80,000 take-home pay example.
How to read your pay stub
- Gross pay / earnings: pay before deductions.
- FIT or Fed Tax: federal income tax withheld.
- OASDI or SS: Social Security.
- Med: Medicare.
- YTD: year-to-date, the total so far this year.
Refund or balance due: what it means
Withholding is an estimate. A large refund means you lent the government money during the year at no interest, and a balance due means too little was withheld. To avoid an underpayment penalty, a common safe-harbor rule is to pay at least 90% of this year's tax or 100% of last year's tax through withholding and estimated payments (110% if your income is higher). The IRS Tax Withholding Estimator on IRS.gov helps you adjust your W-4.
Weekly, biweekly or semimonthly pay
How often you are paid changes the size of each check but not the yearly total. Weekly pay means 52 paychecks, biweekly means 26 and semimonthly means 24. If you are paid biweekly, two months each year contain three paychecks. Budget based on 24 paychecks' worth of income and use the extra two as a savings boost.
How to check your paycheck is right
- Multiply your hourly rate or divide your salary by the number of pay periods to find the expected gross pay.
- Check Social Security (6.2%) and Medicare (1.45%) against your gross wages.
- Compare your federal and state withholding with a calculator estimate.
- Look for deductions you do not recognize and ask your payroll department about them.
Why bonuses seem to get taxed more
Bonuses are often withheld at a flat 22% federal rate, plus payroll taxes. That can look like a bigger bite than your normal paycheck, but it is only withholding. Your real tax is settled when you file your return. The bonus tax calculator estimates what you would take home.
Try the calculators
Frequently asked questions
Why is my paycheck smaller than I expected?
Most often it is because of payroll taxes, state tax or deductions for benefits. A gross salary number does not include them.
Can I increase my take-home pay?
You can adjust your W-4 if you are having too much withheld, but be careful not to under-withhold and owe a bill later.
Is net pay the same as take-home pay?
Yes. Net pay and take-home pay mean the amount deposited after taxes and deductions.
This guide is for general information. Figures use 2026 US federal rules and the assumptions stated above, and are estimates, not financial, tax or legal advice. Check IRS.gov or a qualified professional for your situation.