To calculate the state and federal taxes on a paycheck, work through the deductions in order: start with your gross pay for the period, subtract pre-tax items like 401(k) and health premiums, then apply Social Security at 6.2%, Medicare at 1.45%, federal income tax using the IRS Percentage Method with your W-4, and your state’s withholding formula on top. The math is a sequence of small calculations, and running it yourself is the fastest way to catch a payroll error before it becomes a tax-time surprise.
What You Need Before You Start
Every calculation begins with your gross pay for the pay period. That’s the total you earned before anything comes out. You also need your pay frequency: 26 pay periods a year for biweekly, 24 for semimonthly, 52 for weekly, or 12 for monthly. That number converts annual figures like W-4 adjustments and tax brackets into per-paycheck amounts.
Your Form W-4 drives federal withholding. It carries your filing status, whether you checked the multiple-jobs box in Step 2, any other income in Step 4(a), extra deductions in Step 4(b), dependent credits in Step 3, and any flat extra withholding in Step 4(c).1Internal Revenue Service. Form W-4 (2026) Employee’s Withholding Certificate If you haven’t updated it since you were hired, pull it up before you start.
Most states with an income tax have their own withholding form that works like a state-level W-4. Names vary; the idea is the same. Grab both forms before opening a calculator.
Subtract Pre-Tax Deductions First
This step decides every number after it. If you contribute to a 401(k), pay health insurance premiums through your employer, or fund an HSA through payroll, those dollars come out of gross pay before federal income tax and usually before Social Security and Medicare too. Your employer handles this through a cafeteria plan, which lets you choose pre-tax benefits without the money ever counting as taxable wages.2Office of the Law Revision Counsel. 26 USC 125 – Cafeteria Plans
The common pre-tax items:
- 401(k) or 403(b) contributions, up to $24,500 in 2026, with an $8,000 catch-up at age 50 and an $11,250 catch-up (instead of the standard one) for workers aged 60 through 63.3Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
- Employer health, dental, and vision premiums, typically excluded from both income tax and FICA.4Internal Revenue Service. Employer’s Tax Guide to Fringe Benefits (2026)
- HSA contributions through payroll, up to $4,400 self-only or $8,750 family in 2026, exempt from federal income tax, Social Security, and Medicare.4Internal Revenue Service. Employer’s Tax Guide to Fringe Benefits (2026)
- Healthcare FSA contributions, up to $3,400 in 2026, also pre-tax for both income and FICA.
Subtract all of these from your gross pay. The result is your taxable gross pay, and it’s the starting number for every calculation below. A worker earning $4,000 biweekly who puts $400 into a 401(k) and $100 into an HSA runs the rest of the math on $3,500.
Calculate Social Security and Medicare (FICA)
FICA is the easy part because the rates don’t move. Withhold 6.2% of taxable gross pay for Social Security and 1.45% for Medicare.5Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax On $3,500, that’s $217 and $50.75.
Social Security has an annual wage cap. In 2026, once your year-to-date wages hit $184,500, the 6.2% stops for the rest of the year and your take-home jumps.6Social Security Administration. What Is the Current Maximum Amount of Taxable Earnings for Social Security
Medicare has no cap. The 1.45% applies to every dollar. Once your wages with a single employer cross $200,000 in the calendar year, an additional 0.9% Medicare tax kicks in on wages above that threshold and continues through year-end.7Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates The $200,000 trigger applies regardless of filing status for withholding, though joint filers reconcile at $250,000 on their return.
Calculate Federal Income Tax
Federal income tax is where the work is. Employers use IRS Publication 15-T, which offers two approved methods. The Percentage Method is more precise and works at any income level, so it’s the one to use when you’re checking your own paycheck.8Internal Revenue Service. Publication 15-T (2026), Federal Income Tax Withholding Methods
Step 1: Find Your Adjusted Wage Amount
Start with taxable gross pay for the period. If Step 4(a) of your W-4 shows other income, divide that annual figure by your number of pay periods and add it. If Step 4(b) shows additional deductions, divide by pay periods and subtract. What’s left is your adjusted wage amount. If you left 4(a) and 4(b) blank, your taxable gross pay is already the adjusted wage amount.
Step 2: Apply the Bracket
Take your adjusted wage amount, filing status, and Step 2 box status to the Percentage Method table matching your pay frequency in Publication 15-T. The row gives you a base tax and a marginal rate. Multiply the amount above the bracket floor by that rate, then add the base. That’s your tentative withholding.
The 2026 federal brackets on an annual basis are:9Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill
- 10%: up to $12,400 single / $24,800 married filing jointly
- 12%: over $12,400 / $24,800
- 22%: over $50,400 / $100,800
- 24%: over $105,700 / $211,400
- 32%: over $201,775 / $403,550
- 35%: over $256,225 / $512,450
- 37%: over $640,600 / $768,700
Publication 15-T presents these already divided into per-pay-period amounts, so you don’t have to divide by 26 or 52 yourself.
Step 3: Adjust for Dependents and Extra Withholding
If Step 3 of your W-4 claims dependents, divide that annual credit by your pay periods and subtract from the tentative withholding. The result can’t go below zero. Then add any flat dollar amount from Step 4(c). That final figure is your federal income tax withholding for the paycheck.1Internal Revenue Service. Form W-4 (2026) Employee’s Withholding Certificate
Step 4(c) is worth using if you have a side job, a working spouse, or investment income your employer doesn’t see. The IRS withholding estimator at irs.gov/W4App will tell you whether your current W-4 is tracking.
Calculate State Income Tax
Nine states don’t tax wages, so if you live and work in one of them you can skip this whole layer. Everywhere else, state income tax is another calculation on top of federal.
Flat-Rate States
About a dozen states apply a single rate to all taxable wages. Multiply your state-taxable pay by that rate. Current flat rates run roughly 2.5% to just over 5%. Your state withholding form may allow personal exemptions that come off before you multiply, so read the form first.
Progressive-Rate States
The rest use graduated brackets, similar in shape to federal but with their own numbers. Use your state’s withholding guide (the state equivalent of Publication 15-T). Subtract state exemptions or allowances, then apply the bracket rates in order. State brackets tend to be narrower and top out lower than the federal ones.
If You Cross State Lines
Living in one state and working in another can put you in reach of two withholding systems. Many neighboring states have reciprocal agreements: your employer withholds only for your home state, even though you work elsewhere. Without an agreement, you’ll file in both states and claim a credit at home for tax paid to the work state. Check whether your two states have an agreement before assuming you’ll be taxed twice.
Add Local Taxes and Mandatory State Deductions
Federal and state aren’t always the end. More than 5,000 local jurisdictions across roughly 16 states levy their own income tax, typically 1% to 4%, sometimes as a flat monthly fee. If you work in a major metro, check whether the city or county takes a cut.
Some states also require payroll contributions for state disability insurance or paid family leave. California, Hawaii, New Jersey, New York, and Rhode Island all mandate disability contributions, and more states have added paid-leave deductions in recent years. These lines are usually small, roughly 0.2% to 1.3% of wages, but they show up on the stub and shave your net pay.
Check Your Work Against Your Pay Stub
Once you’ve run through the sequence, subtract every withholding line from your gross pay and compare the result to the net pay on your actual stub. Rounding differences of a few cents are normal. A larger gap usually points to an outdated W-4, a mid-year raise that didn’t flow into state withholding, or a pre-tax deduction that changed without your noticing.
Getting withholding close to your real liability matters at tax time. If you owe more than $1,000 when you file, the IRS may assess an underpayment penalty calculated at the federal short-term rate plus 3 percentage points, applied quarter by quarter to the shortfall.10Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty For the first quarter of 2026, that rate is 7%.11Internal Revenue Service. Quarterly Interest Rates
Two safe harbors avoid the penalty entirely: pay at least 90% of your current-year tax through withholding and estimates, or pay at least 100% of last year’s tax (110% if your prior-year AGI was over $150,000).10Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty The simplest way to hit either target once you spot a shortfall is a flat extra amount in Step 4(c) of a new W-4. Running the paycheck math yourself once or twice a year keeps small problems from becoming April problems.