Take Home Pay Calculator
Use this take home pay calculator to estimate how much you can bring home after tax and deductions for your salary. This calculator is for US residents only.
|
|
In the United States, your gross income after tax and deductions is the actual income you can bring home. If you are an employee, your employer will withhold your tax and deductions from your pay check. If you are self-employed, you are responsible for submitting your tax every quarter and paying your own benefit.
The income taxes in the United States normally contain the following:
Federal income tax—it is a progressive income tax, which means the tax rate increase as the income grows. Currently, the federal income tax rate tops out at 35%.
State income tax—seven states impose no income tax, which are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. In the states that impose an income tax, the lowest maximum rate is 3% in Illinois. The highest maximum rate is 10.3% in California. Most states have a progressive income tax.
Local/City/Municipal income tax—some cities impose local tax, for example New York City, Philadelphia, etc. The state and local taxes are normally deductible for federal income tax.
Payroll tax—refers to Social Security tax and Medicare tax. The Social Security tax rate is 12.4% up to an annual maximum ($106,400 for 2010). The Medicare tax rate is 2.9% with no up limit. If you are self-employed, you are responsible for the full payroll taxes. If you are an employee, the payroll taxes are equally shared by you and your employer, which means your Social Security tax rate is 6.2% until the maximum and your Medicare tax rate is 1.45%.
Unemployment tax—if you are an employee, your employer will pay the unemployment tax with no deduction from your pay check. If you are self-employed, you do not need to pay it. Accordingly, you are not qualified for unemployment benefit on the termination of your self-employment status.
Besides taxes, there can be deductions from you pay check for various reasons, most commonly the employer sponsored retirement savings and the shared cost of benefits. Normally, the employer sponsored retirement savings refers to 401K plan. Many employers provide 401K saving match. Some employers provide pension benefit. The pension benefit should be fully covered by employer with no deduction from your pay check. The shared cost of benefit refers to the partial benefit cost that many employers require the employees to share, for example medical insurance, dental insurance, life insurance, disability insurance, etc. 529 college savings plans, medical spending plans are other common deductions. Self-employed people are responsible for paying all the benefit costs themselves. Most of these benefit costs are tax deductible.
* The result of this take home pay calculator is estimation only. The actually result will be slightly different from the numbers above.