What Does the Government Take Out of Your Paycheck?

The government takes several bites out of your paycheck before it reaches you: federal income tax, Social Security tax at 6.2%, and Medicare tax at 1.45% come out of nearly every U.S. worker’s wages, and most people also see state income tax, sometimes a local tax, and in a handful of states a small deduction for disability insurance or paid family leave. Together these withholdings keep you current on your tax bill throughout the year instead of leaving you with one large payment in April.

Federal Income Tax

Federal law requires your employer to withhold a portion of every paycheck for income tax and send it to the IRS on your behalf.¹ How much comes out depends on what you put on your IRS Form W-4 when you started the job: your filing status, whether you claim dependents, and any additional adjustments.

The federal system is progressive. Only the income that falls inside each bracket is taxed at that bracket’s rate, not your whole paycheck. For tax year 2026, a single filer’s brackets are:

10% on 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% bracket runs up to $24,800, and the 37% rate does not begin until income passes $768,700.² Your employer uses IRS tables built from these brackets to estimate the right withholding for each pay period.

Those tables also assume you will claim the standard deduction: $16,100 for single filers and $32,200 for married joint filers in 2026.² That first slice of your annual pay is effectively shielded from income tax, and the shield is already baked into the withholding math.

Social Security and Medicare

Every paycheck is also hit with taxes under the Federal Insurance Contributions Act. FICA funds two separate programs, and both show up as their own line on your pay stub.

Social Security

Social Security tax takes 6.2% of your gross wages.³ It stops once your year-to-date earnings cross the annual wage base. For 2026 that ceiling is $184,500.⁴ If you earn up to that amount, the most you pay in Social Security tax for the year is about $11,439. Earnings above the wage base are not subject to Social Security tax at all.

Medicare

Medicare tax is 1.45% of all your wages with no ceiling. Every dollar you earn is subject to it.³ High earners pay more: once your wages from a single employer pass $200,000 in a year, your employer must withhold an extra 0.9% Additional Medicare Tax on the amount above that threshold.⁵ The joint-filer threshold is $250,000, but your employer only sees your individual wages, so a married couple whose combined income crosses that line may still owe the extra 0.9% at filing time even if neither spouse triggered the withholding.

What Your Employer Pays

Your employer separately pays another 6.2% for Social Security and 1.45% for Medicare on your wages.⁶ That employer share never appears on your pay stub because it never comes out of your pay. There is no employer match on the Additional Medicare Tax; the extra 0.9% is on employees only.

State Income Tax

Most states tax wages, and your employer withholds state tax alongside federal. The rate and structure vary a lot. Some states use a single flat percentage; others use progressive brackets similar to the federal setup. Rates run from below 3% in the lowest flat-tax states to above 13% at the top bracket in the highest progressive states.

Eight states have no general income tax on wages: Alaska, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you work in one of those, your pay stub will not carry a state income tax line.

Everywhere else, you usually fill out a state withholding form when you start a job, similar in spirit to the federal W-4. Skipping it typically means your employer withholds at the highest default rate until you correct it. A wrinkle worth knowing: some states tax based on where you work, others based on where you live, and some situations require you to file in both.

Local Taxes

Some cities, counties, and school districts add their own payroll tax on top of state and federal. You may see it labeled earned income tax, city wage tax, or local services tax depending on the jurisdiction. Rates are much smaller than state or federal taxes, but they are mandatory where they apply.

Local payroll taxes come in two basic shapes. Percentage taxes work like a small income tax and take a set share of wages. Flat-fee taxes charge a fixed dollar amount per year, often broken into small per-paycheck deductions, and tend to be modest — around $52 a year is common.

Whether you owe one depends on where you work and where you live. Some cities tax everyone working within their limits regardless of residence; others tax residents only; some situations trigger both, though credits usually prevent full double taxation. Two coworkers at the same desk can see different local tax amounts simply because they live in different towns.

State Disability and Paid Family Leave

Around 16 jurisdictions require payroll deductions to fund state disability insurance, paid family leave, or both, and more states are phasing in these programs. The money goes into dedicated funds that pay benefits to workers who miss work for a serious health condition, to bond with a new child, or to care for a family member.

Employee contribution rates generally fall between about 0.2% and 1.3% of wages, depending on the state and the specific program. Some states split the cost with employers; others put the whole premium on workers. Many programs cap the taxable wage amount, so the deduction stops once your earnings hit a set level for the year. If you live in a state with one of these programs, look for a separate line labeled SDI, PFL, or something similar.

Deductions That Aren’t Really Taxes

Not everything shrinking your paycheck is going to the government. Some deductions are pre-tax, meaning they come out of your gross pay before taxes are calculated, which shrinks the wage figure the government taxes in the first place.

Health insurance premiums paid through a Section 125 cafeteria plan are generally exempt from federal income tax, Social Security tax, and Medicare tax.⁷ Traditional 401(k) and 403(b) contributions come out before federal income tax, lowering your taxable wages for the year. Health flexible spending accounts get the same pre-tax treatment, with a 2026 contribution cap of $3,400, and transit and parking commuter benefits can be deducted pre-tax up to $340 per month each.² Each of these reduces the wages your taxes are calculated on.

Wage Garnishments

If you owe certain debts, a court or government agency can order your employer to withhold part of your pay and send it to the creditor. Garnishments sit on your pay stub next to tax withholdings but are different in kind: the money goes toward a specific legal obligation, not general government funding.

Federal law caps most consumer-debt garnishments, such as credit card judgments or medical bills, at 25% of your disposable earnings per pay period.⁸ If your disposable earnings are at or below 30 times the federal minimum wage per week, they cannot be garnished at all for consumer debt. Child support and alimony can reach a bigger share, often 50% to 60% of disposable earnings depending on your situation. Unpaid federal, state, or local taxes have no statutory cap; the government can take whatever the law or order specifies.

Changing What Comes Out

You are not stuck with whatever your original W-4 set up. You can hand your employer a new W-4 at any time to change your federal withholding, and your employer cannot refuse a properly completed form.¹ State withholding usually has its own form you can update the same way.

If you get a big refund every spring, your withholding is set too high and you are lending the government money interest-free all year; lowering it puts more in each paycheck. If you owed a large balance at tax time, raising your withholding or adding an extra flat dollar amount on your W-4 can prevent that and any underpayment penalty. The IRS Tax Withholding Estimator on its website walks through the calculation using your actual income and deductions.

1
Office of the Law Revision Counsel. 26 USC 3402 – Income Tax Collected at Source
2
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
3
Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax
4
Social Security Administration. Contribution and Benefit Base
5
Office of the Law Revision Counsel. 26 USC 3102 – Deduction of Tax from Wages
6
Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
7
Internal Revenue Service. FAQs for Government Entities Regarding Cafeteria Plans
8
eCFR. 5 CFR 582.402 – Maximum Garnishment Limitations