Between roughly 20% and 35% of a typical paycheck goes to taxes before the money reaches your bank account, and the answer to how much tax the government takes from your paycheck depends on three things: how much you earn, where you live, and how you filled out your W-4. Two federal pieces come out of nearly every paycheck: federal income tax, withheld at rates from 10% to 37%, and FICA, a flat 7.65% for Social Security and Medicare combined. Most workers also lose a slice to state income tax, and a smaller group pays a local tax on top of that.
The Flat 7.65% for Social Security and Medicare
FICA is the predictable part. Every paycheck has 6.2% withheld for Social Security and 1.45% withheld for Medicare, for a combined 7.65% of your gross wages.1Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax Your employer pays a matching 6.2% and 1.45% out of its own pocket, but that half never shows up on your pay stub.2Office of the Law Revision Counsel. 26 USC 3111 – Rate of Tax
The Social Security half has a ceiling. In 2026, only the first $184,500 you earn is subject to the 6.2%. Once your year-to-date wages pass that line, Social Security tax stops coming out for the rest of the year.3Social Security Administration. What Is the Current Maximum Amount of Taxable Earnings for Social Security Medicare has no cap. Higher earners actually pay more: an extra 0.9% Additional Medicare Tax on wages above $200,000 for single filers or $250,000 for a married couple filing jointly.1Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax Employers start withholding that surcharge automatically once your wages pass $200,000, and any difference gets sorted out on your tax return.
Federal Income Tax Brackets
Federal income tax is where the range in your paycheck comes from. It’s a progressive system: your income is taxed in layers, and only the dollars inside each layer are taxed at that layer’s rate. Crossing into a higher bracket doesn’t raise the rate on the dollars below it.
For 2026, single filers face seven brackets:
- 10% on taxable income up to $12,400
- 12% on income from $12,401 to $50,400
- 22% on income from $50,401 to $105,700
- 24% on income from $105,701 to $201,775
- 32% on income from $201,776 to $256,225
- 35% on income from $256,226 to $640,600
- 37% on income above $640,600
Married couples filing jointly get wider brackets. The 10% band covers the first $24,800 of taxable income, and the top 37% rate starts above $768,700. “Taxable income” is not the same as gross wages: it’s your wages minus the standard deduction, which in 2026 is $16,100 for single filers, $32,200 for married filing jointly, and $24,150 for head of household. A single person earning $50,000, then, is taxed on roughly $33,900, not the full $50,000.4Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
Federal law requires your employer to deduct and withhold income tax from every paycheck using IRS tables.5Office of the Law Revision Counsel. 26 USC 3402 – Income Tax Collected at Source Those withholdings are estimated prepayments toward your final bill. Overpay and you get a refund. Underpay and you owe in April, sometimes with a penalty attached.
State and Local Income Taxes
Where you live and work adds another layer. Most states charge their own income tax. Some use a flat rate, some mirror the federal progressive-bracket approach, and nine states charge no individual income tax on wages at all. That gap is a real part of why the same salary produces very different take-home pay in different states.
Some counties and cities layer a local earned-income or payroll tax on top of the state’s. About 11 states authorize their local governments to do this, so most workers never see a local income tax line on a pay stub.
Cross-border commuters have their own wrinkle. If you live in one state and work in another, both states could in principle tax your wages. Many neighboring states have reciprocity agreements: you file an exemption form with your work state and pay income tax only where you live. Without an agreement, you generally owe your work state and claim a credit on your home-state return, though the credit doesn’t always cover the full amount.
Pre-Tax Deductions That Lower What Gets Taxed
Certain deductions come out of your paycheck before taxes are calculated, which shrinks the wages actually subject to withholding. These lower your federal income tax, Social Security, and Medicare all at the same time.
The main pre-tax deductions are traditional 401(k) or 403(b) contributions, employer health insurance premiums run through a cafeteria plan, and payroll contributions to a health savings account. For 2026, you can defer up to $24,500 of salary into a 401(k), with an $8,000 catch-up if you’re 50 or older, or an $11,250 catch-up if you’re between 60 and 63.6Internal Revenue Service. IRS Notice – 2026 Amounts Relating to Retirement Plans and IRAs Salary reductions for cafeteria-plan health premiums are not counted as wages for federal income tax or FICA purposes.7Internal Revenue Service. FAQs for Government Entities Regarding Cafeteria Plans HSA limits for 2026 are $4,400 for self-only coverage and $8,750 for family coverage.8Internal Revenue Service. Rev. Proc. 2025-19 – HSA Inflation Adjusted Amounts for 2026
A worker earning $60,000 who puts $6,000 into a 401(k) and $2,400 toward health premiums only has $51,600 subject to federal income tax withholding. Each pre-tax dollar you route through payroll is a dollar the government doesn’t tax that pay period.
Your W-4 Controls the Federal Withholding Amount
Your employer doesn’t estimate how much federal tax to withhold. The calculation begins with the Form W-4 you filled out on hire, which you can update anytime. It collects your filing status, information about dependents, adjustments for multiple jobs, and any extra withholding you want on top. If you never submit one, your employer must withhold as if you’re single with no adjustments, which usually pulls more tax than necessary.9Internal Revenue Service. Topic No. 753, Form W-4, Employees Withholding Certificate
Filing status is the big lever inside the W-4 because it sets which brackets and which standard deduction your employer uses. Married filing jointly comes with a $32,200 standard deduction versus $16,100 for single, so the same gross paycheck produces less withholding under the joint status.
Two jobs, or two working spouses, creates the most common withholding trap. Step 2 of the W-4 gives you three options: the IRS Tax Withholding Estimator, the Multiple Jobs Worksheet on the form itself, or a checkbox that roughly doubles withholding at each job.10Internal Revenue Service. FAQs on the Form W-4 Skipping this step when you have multiple income sources is one of the main reasons people owe a surprise balance at tax time.
A small group can claim complete exemption from federal withholding. To qualify, you must have owed zero federal income tax the prior year and expect to owe zero in the current year.11Internal Revenue Service. Form W-4 – Employee’s Withholding Certificate It applies mostly to very low-income workers, and it expires each year.
What the Numbers Look Like on a Real Paycheck
Every paycheck runs through the same subtraction order. Start with gross pay, take out pre-tax deductions (retirement, health premiums, HSA), calculate FICA on the reduced amount, calculate federal income tax withholding, then subtract state and local taxes. What’s left is your net pay.
A single filer earning $60,000 with no pre-tax deductions takes home roughly $47,000 to $49,000 per year after federal income tax and FICA, depending on W-4 choices. Add state income tax at moderate rates and take-home drops closer to $44,000 to $46,000. That’s the 20% to 35% range in practice, and where any given worker falls inside it depends mostly on income level, state of residence, and how the W-4 is filled out.
If the amount coming out looks wrong in either direction, the fix is a new W-4. The change takes effect within 30 days of your employer receiving it, and reviewing a single pay stub is usually enough to confirm the numbers are landing where you want them.