To calculate monthly net income after taxes, start with your gross monthly pay, subtract pre-tax deductions like health insurance and traditional 401(k) contributions, then subtract federal income tax, Social Security and Medicare (FICA), state and local taxes, and finally any post-tax deductions. What’s left is your take-home pay. For someone earning $6,000 a month gross, the number that actually reaches the bank usually falls somewhere between $4,000 and $4,800, depending on filing status, state of residence, and benefit elections.
The formula in one line:
Monthly Net Income = Monthly Gross − Pre-Tax Deductions − Taxes − Post-Tax Deductions
Turn Your Paycheck Into a Monthly Gross Figure
If you’re paid monthly, you already have your gross monthly income. Every other pay schedule needs a conversion, and the wrong shortcut here throws off everything downstream.
- Weekly: multiply gross pay by 52, divide by 12.
- Biweekly: multiply by 26, divide by 12.
- Semimonthly (twice a month): multiply by 2.
- Monthly: no conversion.
Biweekly is where people go wrong most often. There are 26 biweekly paychecks in a year, not 24, so two months contain three checks. Doubling a biweekly stub undercounts your annual income by roughly 8%. Always run through the annual total, then divide by 12.
Averaging Variable or Seasonal Pay
Overtime, bonuses, commissions, and seasonal work move the number around. Average this income over 12 to 24 months rather than picking any single paycheck. Mortgage lenders require at least 12 months of history for bonus or overtime income to count as stable, and they generally look at W-2s from the last two years to confirm the trend.1Fannie Mae. Base Pay (Salary or Hourly), Bonus, and Overtime Income For your own budget, use the more conservative average. If work is genuinely seasonal, add up the full year and divide by 12 rather than budgeting around peak months.
Subtract Pre-Tax Deductions First
Certain deductions come off your gross pay before your employer calculates tax withholding. They lower your taxable income, which is why the order matters when you run the math yourself.
- Health, dental, and vision premiums under a Section 125 cafeteria plan are exempt from both income tax and FICA.
- Traditional 401(k) and 403(b) contributions reduce federal income tax but still get hit with Social Security and Medicare. The 2026 elective deferral limit is $24,500, or $32,500 if you’re 50 or older. Workers aged 60 through 63 have a higher catch-up limit of $35,750.2Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
- Health savings account contributions if you have a high-deductible plan: up to $4,400 for self-only coverage or $8,750 for family coverage in 2026.3Internal Revenue Service. Rev. Proc. 2025-19
- Flexible spending accounts for medical or dependent care expenses.
Do the subtractions in order. Take Section 125 health premiums off first, because they reduce the base for FICA. Then subtract 401(k) contributions, which reduce the base only for income tax. That gives you the two different starting figures your employer uses to calculate withholding.
Federal Income Tax Withholding
Federal income tax is usually the biggest single line on your pay stub. It depends on filing status, income, and what you put on your Form W-4. The 2026 brackets are marginal, meaning each rate applies only to the portion of income that falls inside that bracket.
Single filers, 2026:
- 10% on income up to $12,400
- 12% from $12,401 to $50,400
- 22% from $50,401 to $105,700
- 24% from $105,701 to $201,775
- 32% from $201,776 to $256,225
- 35% from $256,226 to $640,600
- 37% above $640,600
Married filing jointly, 2026:
- 10% on income up to $24,800
- 12% from $24,801 to $100,800
- 22% from $100,801 to $211,400
- 24% from $211,401 to $403,550
- 32% from $403,551 to $512,450
- 35% from $512,451 to $768,700
- 37% above $768,700
The 2026 standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly, applied to your taxable income before these rates run.4Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill A single filer with $60,000 in taxable income doesn’t pay 22% across the board. They pay 10% on the first $12,400, 12% on income up to $50,400, and 22% only on the slice above that. The effective rate lands well below the top bracket you touch.
Social Security and Medicare (FICA)
FICA is a flat rate. The employee share is 6.2% for Social Security and 1.45% for Medicare, no matter what your W-4 says.5Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates Your employer pays a matching share, but that doesn’t show up on your stub.
Social Security has a wage ceiling. In 2026, only the first $184,500 of wages is subject to the 6.2% tax.6Social Security Administration. Contribution and Benefit Base If your earnings cross that line during the year, later paychecks come in slightly larger because Social Security stops. Medicare has no ceiling. An extra 0.9% Medicare surtax applies to wages over $200,000 for single filers or $250,000 for married couples filing jointly, and employers don’t match the surtax.
For someone with $6,000 in monthly gross pay and no pre-tax adjustments, FICA totals about $459 per paycheck: roughly $372 for Social Security and $87 for Medicare.
State and Local Taxes
Where you live can shave a lot off your paycheck or nothing at all. Eight states have no individual income tax. Others reach top marginal rates above 10%. Most states use graduated brackets; a few apply a flat rate.
About a dozen states plus the District of Columbia also collect payroll deductions for state disability insurance or paid family leave, usually between 0.5% and 1.3% of wages up to an annual cap. Look for line items labeled SDI, PFL, or PFML on your stub. Some cities and counties add their own income or payroll taxes.
If you moved during the year, or if you work remotely for an employer based in a different state, you may have withholding in more than one jurisdiction. That complicates both the paycheck math and the annual return.
Subtract Post-Tax Deductions
After tax withholding is done, a few more items can come off before the money lands in your account:
- Roth 401(k) or Roth 403(b) contributions, which use after-tax dollars in exchange for tax-free withdrawals later.
- Disability or life insurance premiums, often split between pre-tax and post-tax portions.
- Union dues, typically deducted after taxes.
- Wage garnishments for child support, unpaid debts, or tax levies. Child support takes priority over other garnishments.7eCFR. 29 CFR Part 20 Subpart F – Administrative Wage Garnishment
- Payroll-deducted charitable contributions.
The year-to-date column on your pay stub is the fastest way to catch a stray deduction. Scan the line items at least once a quarter. An unauthorized $20 per paycheck runs close to $500 a year.
A Worked Example
A single filer earns $72,000 per year, or $6,000 gross per month. She contributes 5% of pay to a traditional 401(k) and pays $200 per month for health insurance through a Section 125 plan.
- Monthly gross pay: $6,000
- Health insurance (pre-tax): −$200
- 401(k) contribution (5%, pre-tax): −$300
- Federal income tax: approximately −$430 (2026 brackets, after standard deduction and pre-tax items)
- Social Security (6.2% of $5,800): −$360
- Medicare (1.45% of $5,800): −$84
- State income tax: approximately −$240 (varies widely)
- Total deductions: −$1,614
- Monthly net income: $4,386
Two details are worth pointing out. FICA is calculated on $5,800, not $6,000, because the Section 125 health premium reduces the FICA base. The 401(k) contribution lowers the base for income tax but not for FICA. The state line is a placeholder; your actual figure could be zero or noticeably higher.
If your paycheck moves around from month to month, run the calculation on your 12- or 24-month average gross instead of a single stub. The goal is a stable figure you can budget against.
If You’re Self-Employed
Self-employed workers don’t have an employer running withholding, so the calculation starts differently. Add up gross receipts for the year, subtract legitimate business expenses (supplies, software, business use of vehicle, office rent, and so on) to reach net profit.8Internal Revenue Service. Topic No. 554, Self-Employment Tax Net profit is the self-employed equivalent of an employee’s gross wages.
Self-employment tax runs 15.3% of net profit: 12.4% for Social Security and 2.9% for Medicare, covering both the employer and employee shares.9Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) You can deduct half of that when calculating adjusted gross income. The Social Security portion still stops at $184,500 of net earnings in 2026.6Social Security Administration. Contribution and Benefit Base Sole proprietors, partnerships, and S corporation owners may also qualify for the 20% qualified business income deduction, which the One, Big, Beautiful Bill made permanent, with phase-outs for certain service businesses.10Internal Revenue Service. Qualified Business Income Deduction
Because no one is withholding for you, quarterly estimated tax payments are due four times a year. For 2026, the dates are April 15, June 15, September 15, and January 15, 2027.11Internal Revenue Service. Form 1040-ES – Estimated Tax for Individuals To get to monthly net income, take annual net profit, subtract self-employment tax, federal income tax (after the QBI deduction and the deduction for half of SE tax), and state income tax, then divide by 12. If income swings by season, average two years of returns rather than a strong quarter.
Non-Taxable Income
Some income doesn’t get taxed the same way as wages: Social Security benefits for many recipients, certain disability payments, tax-exempt interest, and child support received. If part of your monthly income falls in one of these categories, your effective take-home is higher than the same dollar figure earned as taxable wages, because fewer deductions come off.
Mortgage lenders recognize this through “grossing up.” Under Fannie Mae guidelines, a lender may add 25% to verified non-taxable income when calculating qualifying income, or a higher percentage if it matches the actual tax a wage earner in a comparable bracket would pay.12Fannie Mae. General Income Information So $2,000 per month in non-taxable disability benefits may be treated as $2,500 when the lender runs your debt-to-income ratio. That adjustment only shows up during loan underwriting, not on your regular monthly budget.